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When it comes to the jewelry business, there is an outfit on Fifth Avenue that has made the little blue box one of the most welcome sights in the world.
Tiffany & Co. (NYSE: TIF) is engaged in the design, manufacture, and retailing of fine jewelry, timepieces, sterling silverware, china, crystal, stationery, fragrances and personal accessories. The firm sells its goods exclusively through some 150 stores worldwide, a Web site and catalogs.
The company pleased investors last week, when it reported Q2 EPS of 45 cents and revenues of $662.6 million. Analysts had been expecting 35 cents and $645.7 million. Management also guided FY08 EPS to $2.22-2.27, versus consensus of $2.14. WR Hambrecht and CIBC subsequently declared the stock a "buy".
The stock popped on the news and has since been forming a bullish "flag" consolidation pattern. Equities frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Altogether, brokers now recommend the issue with four "strong buys", four "buys", eight "holds" and one "sell". The TIF Price to Sales ratio (2.48), Price to Book ratio (3.65), EPS Growth rate (55.17%) and Return on Assets (9.87%) compare favorably with industry, sector and S&P 500 averages.
About 91% of the outstanding shares are held by institutional investors. The stock is one of those used to calculate the S&P 500 Index. Over the past fifty-two weeks, it has traded between $32.82 and $56.79. A stop-loss of $42.50 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
[photo trec_lit]
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