Not only is brand image of utmost importance, they have to ensure the company can push through a shrinking market because people will stop spending on these products as their incomes enter a state of jeopardy. Coach operates two stores, their main stores in malls and stand alone locations, as well as outlet mall stores where their less expensive products go and are sold. Usually these are out of season or older models that are no longer worthy of their main stores. These are what attract the buyers because they can get the same quality product for a substantial discount.
Taking a look at the chart using the monthly time frame, we can see that the chart is presenting a well defined reverse head and shoulder pattern. The shoulders occur around the $33-$35 area with the head around $28. $43.25 appears to be a real resistance area, but if you know how head and shoulders work, this could finally mean a break to the upside. If the breakout to the upside occurs, look for the next area of resistance, which appears to be around $48-$50. The great thing about looking at the long time frame is that you can see long term potential and utilize products such as options.
How important is Coach's Liquidity
Coach
financial leverage refers to using borrowed capital as a funding source to finance Coach Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Coach financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Coach's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Coach's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Coach's total debt and its cash.
A Deeper look at Coach
Being in the fashion industry certainly has its risks, and the first one to keep in mind is product quality. When you spend hundreds of dollars on hand bags and other products, you want to know you are obtaining a product that will lost longer than a few months. Secondly, another risk is that the company has to maintain their edge by producing trendy products that people will purchase. Too many misses in that department could spell the end to a product line, brand image, or in extreme cases the business as a whole.
From a technical stand point, the company appears to be doing well enough to position themselves for a potential breakout. Fundamentally, you will have to dig a little deeper and fully understand what is going on with sales, cash flow, etc. Also, be aware of competition and if there is value to be had elsewhere, do not hesitate to move. Research and fully understand if you are able to take on the possible risk, once you’ve established that, you can make your next move.
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Coach Inc. Please refer to our
Terms of Use for any information regarding our disclosure principles.
Would you like to provide feedback on the content of this article?
You can get in touch with us directly or send us a quick note via email to
editors@macroaxis.com
