Michael Kors Holdings (KORS) sells branded apparel for men and women as well as branded accessories. It has enjoyed enviable growth. Unfortunately, it has been bid up 90% to very high valuation multiples, well above its large cap peers which have only appreciated by about 20% year-to-date. When compared to its peers, it is readily apparent that investors should stay away from KORS shares at current price levels. This stock's high price multiples should dissuade investors from buying at current prices until its valuations descend closer to those of its peers.
Growth vs. Value
As human beings we love compelling growth stories. The Michael Kors growth story is about the rise of the affluent in China, a very interesting and popular macroeconomic phenomenon. Unfortunately, stories like this one sometimes increase stock multiples beyond reasonable levels.
Regardless of how shiny a stock is, investors should never buy a stock because
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