If there is a bright side to a market that behaves spastically and seems to be leaning toward the downside, it is that companies you might not normally consider for valuation reasons start crossing your radar.

This is exactly what has happened with Coach (NYSE:COH) in the last week. Since the company reported earnings about a month ago, the shares have slowly drifted downward, and the last week or so of choppy trading only accentuated the decline. When the shares recently touched a 52-week low of $27.91, they crossed my radar, and I have to admit I was a bit surprised to see Coach trading down that far.

It is a real concern as to how well Coach will hold up in an economy where the U.S. consumer is getting squeezed by inflation and decides to take cover. However, this concern is slightly tempered by Coach's rapid sales growth abroad, particularly in Japan, where income taxes are a bit lower, disposable income higher, and the economy is slowly turning around.

The question is whether the shares are actually cheap enough to buy or merely just starting to get interesting. To find out, I referred to my previous discounted cash flow analysis for Coach to update the financials and some of my assumptions. If you believe average 10% growth for the next five years is possible, I found that Coach is indeed getting interesting at under $28 a share, but that the price would have to fall another few dollars to offer a significant margin of safety. If, however, you believe that analyst estimates for average 20% growth for the next five years are possible, then shares are a bargain. (As a side note, I don't believe those estimates are realistic.)

This puts Coach in the same bucket as PepsiCo (NYSE:PEP), Cintas (NASDAQ:CTAS), and Boston Beer (NYSE:SAM). All are good companies that I would like to own if only they were a little bit cheaper.

So, I don't think it's time to settle into a long-term holding of Coach at this point, but with the volatility in the market recently, an opportunity may come sooner than I had thought possible just a few months ago. In the meantime, I'll be keeping my options open and a little bit of cash on the side in case an opportunity presents itself. It's the dips in the market that make things the most interesting in the long term. Enjoy the long weekend, everybody.

Nathan Parmelee has no financial interest in any of the companies mentioned. The Motley Fool has an ironclad disclosure policy.