Greedy Buy: Tiffany & Co.

On January 10^th Tiffany & Co. released sales numbers and an updated earnings forecast. Mr. Market was not impressed, and he subsequently discounted the stock by over $5/share.

Here is a summary of their y/y sales for the two months ended Dec 31^st 2011

– The Americas saw modest growth of 4%

– New York flagship store declined 1%

– Europe was essentially flat, increasing just 1%

– Asia-Pacific increased 19%

– Japan sales increased 13%

Tiffany’s full year earnings forecast was notched down from $3.70 – $3.80 to $3.60 – $3.65. The initial forecast given last March was $3.35 – $.3.45, perhaps they got a little too excited. Anyways, the current forecast is represents earning growth in the 23% – 25% range.

Regardless of Mr. Market’s opinion, Tiffany & Co. is not that shabby. I appreciate their profitability, financial stability, brand recognition, stable dividend, and rapid sales growth in the East. Technically the stock is oversold, and price is testing an area of known support. I bought shares last week around $59.50 because I expect a bounce to occur relatively soon. My stop-loss on this trade is around $58.50 and my profit target is around $63 – $64.

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