Movado beats estimates -- is now the moment to buy?

As Trey Thoelcke mentioned earlier today, Movado beat estimates. While the loss was smaller than anticipated, a big element of today's price action probably centered on the guidance. Movado believes it will generate a profit of $0.50 per share for the full fiscal year. This would compare very favorably to the $0.09 per share earned in the previous fiscal year.

While the guidance should be pleasing to investors, I have to say that the rally in this name is probably a little overdone at this point. Today's buyers are basically betting on a good Christmas season. A lot of the buying in the retail sector is predicated on the same thesis. When I look at how far many of these stocks have come in the last few months, I do shake my head in wonder. Is it all short covering? Probably not. I'm sure there are many legitimate bidders in the crowd.

I nevertheless would not be a buyer of Movado at these levels. As I write this, shares are trading at $11.10. That gives the stock a rough P/E of 22 based on that $0.50 per share outlook. Am I crazy to think that's a little expensive in this environment? Maybe so. My point is, wait until Movado gets a little cheaper before looking at it, if only for a margin of safety.

Disclosure: I don't own any company mentioned; positions can change without notice.