Kaminsky's Call: Browse, But Don't Buy Ralph Lauren Stock
Morgan Stanley, Vice Chairman
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.
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Gary Kaminsky does not hold any equity positions.
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