Kaminsky's Call: Browse, But Don't Buy Ralph Lauren Stock
Talk about a fashion faux pas.
Polo Ralph Lauren priced a massive secondary this morning in which the CEO, Ralph Lauren, will sell nearly a quarter of his holdings, a staggering nine million shares.
Diversification, estate planning, and tax purposes are all legitimate reasons for Mr. Lauren to sell here, but let's not kid ourselves. His eye for clothes is only matched by his financial vision.
If he's selling, I'm not buying, so my "Call-to-Action" is something I've done countless times when visiting one of his stores; browse, but don't buy.
Buyers in these types of deals tend to be short-term flippers, not the type of long-term investors that would be interested in owning shares of a value company like Polo Ralph Lauren.
The value guys tend to be more tactical about secondaries, waiting for a 10-15 percent pullback before getting in.
Huge offerings like these get investors excited. But if you're in this for the long haul, wait for the stock to come in before making a purchase.
Few question Mr. Lauren's sense of style. Fewer should attempt to outsmart his sale.
"The Strategy Session," hosted by David Faber and Gary Kaminsky, airs weekdays at Noon ET on CNBC.
Gary Kaminsky does not hold any equity positions.
The content of this blog is published in the United States of America and persons who access it agree to do so in accordance with applicable U.S. law.
All opinions expressed in this blog are solely the opinions of Gary Kaminsky and do not reflect the opinions of CNBC, NBC UNIVERSAL or their parent company or affiliates, and may have been previously disseminated on television, radio, internet or another medium. You should not treat any opinion expressed by Mr. Kaminsky as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Mr. Kaminsky’s opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Kaminsky, CNBC, its affiliates and/or subsidiaries are not under any obligation to update or correct any information provided on this website. Mr. Kaminsky’s statements and opinions are subject to change without notice. No part of Mr. Kaminsky’s compensation from CNBC is related to the specific opinions he expresses.
Past performance is not indicative of future results. Neither Mr. Kaminsky nor CNBC guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed on this website or on the show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this website or on the show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this website or on the show. Before acting on information on this website or on the show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.