Coach (COH) Sinks on Department Store Worries

Posted: Tuesday, November 17, 2009 1:43 PM EDT

Coach (NYSE: COH) opened at $36.00. So far today, the stock has hit a low of $33.90 and a high of $36.02. COH is now trading at $34.15, down $1.84 (-5.11%). Over the last 52 weeks the stock has ranged from a low of $11.41 to a high of $37.10. COH shares are trading lower today on worries that tight inventories at department stores will cut into holiday orders from the handbag maker. Earlier today, retailers Saks (SKS) and Dillards (DDS) each pointed to declining inventories to explain positive third-quarter earnings. COH derives about 14% of its revenue from indirect channels like department store sales. This could be a bad sign for COH. Technical indicators for the stock are bullish and S&P gives COH a positive 5 STARS (out of 5) strong buy ranking. If you are looking for a hedged play on COH the stock seems like it could be a candidate for a January out-of-the-money bear-call credit spread above the 38 range. [ABR-Seven Summits Strategic Investments NewsBite]

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