Sophisticated Investors Should Avoid: Capri Holdings Limited (CPRI), Lithium Americas Corp. (LAC)

Capri Holdings Limited (NYSE: CPRI) shares are -55.60% down in the year-to-date (YTD) period and have moved 2.48% or $0.41 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +212.55% lower. Comparatively, the stock is -56.99% down YTD and 0.83% over the trailing 3-month period. If we look at the shorter duration, its week performance is 13.01% and 10.79% over the month.

Analyst Recommendations

On April 29, 2020, BTIG Research recommended the CPRI stock is a Neutral, while earlier, Piper Sandler had Downgrade the stock as a Neutral on May 18, 2020. 24 analysts offering the recommendations for the stock have a consensus rating of 2.60 to suggest that the CPRI stock is a “Moderate Buy. 0 of the 24 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 7 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $16.94 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $18.48. The forecasts give the Capri Holdings Limited stock a price target range of $25.00 on the higher side while at least one analyst think the stock could plunge to a low of $15.00. The two limits represent an upside potential of 32.24% or -12.93%.

Earnings Forecast

Analysts estimate the earnings to increase 6.30% in the current quarter to -$0.03, down from the $1.16 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $0.45, down -33.20% from $3.89 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.68 and $1.4. Wall Street estimates earnings per share to be at an average of $2.86 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 26 over the last 12 months, while SEC filings reveal that there have been 24 insider sales over the same period. Insiders have purchases 2,674,982 shares while those sold by company executives and officers stand at 2,601,516. The last 3 months have seen insiders trade a total of 99,922 and 40,619 in purchases and sales respectively.

Lithium Americas Corp. (NYSE:LAC), on the other hand, is trading around $7.39 with a market cap of $669.85M and analyst research firms have a positive stance on its shares.

Let us briefly look at the Lithium Americas Corp. (LAC) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

LAC’s operating expenses over the recent quarter were at $6.49 million. With this in place, we can see that the company’s diluted EPS declined -$0.06 on the year-over-year period, shrinking to -$0.07 as given in the last earnings report.

The cash flow from operating activities totaled -$16.57 million, significantly lower than the -$9.34 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$68.5 million.

Major holders

Insiders own 37.37% of the company shares, while shares held by institutions stand at 14.34% with a share float percentage of 55.73M. Investors are also buoyed by the number of investors in a company, with Lithium Americas Corp. having a total of 69 institutions that hold shares in the company.