Sunday, November 11, 2007
One of the very few individual stocks I own is Coach, because I love their hand bags and have done so for 30 years. One of the company's issues has always been how to generate continued sales when it produces a durable product that remains stylish for many years. The company has dealt with this problem brilliantly and has constantly found ways to deal with this; the best example is its invention, a few years ago, of the "wristlet," a small purse that we wear on our wrists, a product that previously we did not realize that we needed. Because I have faith in the company and its ability to create new products that will appeal to me, I have no plans to sell my Coach stock, even though the stock price is currentlly trading around 32.50, down from $54 in the first quarter. So I am disappointed to learn that Coach executives may not share my confidence in the Coach brand. As reported in today's New York Times, Coach insiders have sold $57.2 million in stock recently. The New York Times article quotes an analyst, who explains the difference between selling on what one knows about an industry, which is legal, and on inside information, which is illegal. According to the analyst, Coach "is a perfect example of the former." Maybe so, but I liked my impression of Coach better -- that it is a company that has the confidence to figure out what I want to own next and make a quality product that meets that newly discovered need. So I'm disappointed. NYTimes, Insiders Bail, Stockholders Suffer.