I often look at the reaction Mr. Market gives to a company that beats or misses earnings by a penny and wonder where else in the world is a penny valued so spectacularly in the immediate term. Of course, it's not as simple as a penny, because most companies have millions -- or billions -- of shares. But given all the estimates at work in accounting, and in turn at a company's disposal, coming up with an extra penny isn't all that difficult sometimes.
Today's winner by a penny is fashion king-pin Ralph Lauren
For Ralph Lauren, this performance builds on last year's success and more of the same is expected in the next year. Personally, I wouldn't be too surprised, because Ralph Lauren came up on a screen I ran for increasing margins about six months ago, along with fellow retailer Limited Brands
For investors interested in Ralph Lauren, there's a lot to like. The business has been taking greater control of its brand by repurchasing rights from licenses and bringing them in house. The most recent examples being the footwear license from Motley Fool Stock Advisor pick Reebok
With a solid balance sheet, improving operational performance, strong free cash flow, and a small dividend, Ralph Lauren appears to offer growth at a reasonable price today and, should its brand consolidation and control strategy bear fruit, well into the future.
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