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Tom’s Test Tells Us If This Retail “Bargain” Is the Real Deal

Thursday, February 9, 2017 3:25
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(Before It's News)

“Affordable luxury” giant Michael Kors Holdings Ltd. (KORS) disappointed its shareholders Tuesday morning when the company announced misses on sales and revenue then threw very cold water on its guidance heading into the spring season.

Not even a modest diluted EPS beat of $1.64 could save the famous “$300 bag” provider from tumbling 14% in a day and, in fact, leading the entire New York Stock Exchange in daily losses.

Now, on the same earnings call, corporate chiefs announced some bold plans for turning the company’s fortunes around in 2017. Their vision included slashing discounts and reducing supply, which might hurt sales in the short term, but which executives feel will, long term, “build a better value” and restore their products’ rapidly fading sheen of exclusivity.

Bargain stock buyers and financial pundits liked the taste of the proposed strong medicine enough to send the shares higher yesterday, calling the stock a great buy at Wednesday’s prices.

CNBC Asia’s “Capital Connection” asked our Options Trading Specialist Tom Gentile if there was something to the buzz, or if the shares were better left alone.

He gives us the scoop with KORS stock here, using his “Three Ms of Retail Risk” to measure if it’s a true bargain buy today…

Tags: Stocks

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The post Tom’s Test Tells Us If This Retail “Bargain” Is the Real Deal appeared first on Money Morning – We Make Investing Profitable.

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