Point72 Asset Management founder Steven Cohen (Trades, Portfolio) initiated a 5.14% stake in fashion handbag designer Vera Bradley Inc. (VRA, Financial) on June 30.
Cohen’s firm, which was founded in 2014 as a successor to SAC Capital Advisors, uses a bottom-up approach to identify discretionary long-short equities. Consumer cyclical, health care and energy are the three largest sectors represented in his portfolio. His current portfolio of 794 stocks is valued at $17.94 billion.
Having previously sold out of Vera Bradley in second-quarter 2016, Cohen purchased 1.8 million shares for an average price of $9.38 per share, giving it 0.1% portfolio space.
The graph below illustrates Cohen’s holding history in relation to the stock price.
Headquartered in Fort Wayne, Indiana, Vera Bradley is a popular designer of women’s handbags, luggage, travel items, eyewear, stationary and other accessories. The company has a market cap of $358.29 million; its shares were trading around $9.91 on Thursday with a price-earnings (P/E) ratio of 27.5, a price-book (P/B) ratio of 1.3 and a price-sales (P/S) ratio of 0.7.
The Peter Lynch chart below shows the stock is trading above its fair value.
GuruFocus ranked the company’s financial strength 9 of 10 and its profitability and growth 6 of 10.
In its fiscal first-quarter 2018 earnings report, which was released May 31, the company posted revenue of $96.1 million, down from $105.2 million in the prior-year quarter. It also reported a GAAP net loss of $4 million, or -11 cents per share, down from a net income of $2.4 million, or six cents per share, the year before.
The graph below shows the trend in the company’s revenue growth since 2009.
CEO Robert Wallstrom attributed the declines to “challenges in the retail environment.” He emphasized April sales improved over those in February and March, and the net loss per share beat guidance due to “expense management, the timing of certain expenses and a lower-than-expected tax rate.”
Among the gurus invested in Vera Bradley, Mariko Gordon (Trades, Portfolio) is the largest shareholder with 8.9% of outstanding shares. Jim Simons (Trades, Portfolio), Chuck Royce (Trades, Portfolio), Barrow, Hanley, Mewhinney & Strauss, Paul Tudor Jones (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) also own the stock.
Disclosure: I do not own the stock mentioned in the article.
