There is a phenomena I have seen over and over again. It usually manifests itself as follows:
Company appears to be doing well via the numbers. Sales are growing, margins are expanding and the multiple is huge (too expensive for me). BUT...
I can't work out why the company is doing as well as it is. THEN...
It disappoints the street and the multiple shrinks enormously even as profits are substantial and it seems to the company is doing a lot more things right.
Case in point today is Coach (COH) which reported another disappointing quarter and is in Wall Street's doghouse.
The same could also be said for Apple.
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