Luxury: Top Picks - GuruFocus.comLuxury: Top Picks

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tiffany jewelry outlet tiffany outlet tiffany jewelry outlet GuruFocus Now Covers World Stock Markets Introductory Price Try it Now! tiffany All Articles and Columns » Search Articles by Stock Symbol, Guru Names, or Keywords: Luxury: Top Picks October 12, 2013 | About: TIF +0% BURBY +0% LVMUY +0% Print Email Bookmark fedezaldua Articles (29) 0 followers Follow According to Credit Suisse, global wealth grew by 5% year-over-year, compared with a global decline of 5% in the prior year. According to the same research report, the US saw the biggest improvement with wealth up by 13% thanks to the recovery in property prices and the on-going rally in equity markets. Moreover, the bank expects wealth to increase by 7% per year until 2018. With this in mind, here I want to take a look at my two top luxury equity ideas. Resilient growth and a potential M&A target Tiffany Co. (TIF), which is held by Joel Greenblatt and Daniel Loeb , is my top pick among US luxury companies given its status as a leading global jewelry brand. The company should be able to growth its top line at a high single digit rate while also growing year-over-year earnings at rates close to 10%. This growth should mainly come from the Asia-Pacific and European regions (where the company is growing year-over-year same-store-sales by 13% and 7%, respectively). I would also expect the company to expand margins thanks to improving raw material prices and a mix shift towards higher-margin regions of the world. tiffany outlet online Tiffany, which trades at 21 times earnings and 11 times EBITDA, has a market capitalization of $9.8 billion. The company is also a compelling M&A target given its low debt (0.6 times 2013 EBITDA) and the resilience of its revenue stream. A re-born brand I love the way the Burberry (BURBY) brand has been gaining global momentum. The company's strength in the Chinese market and in the UK (40% of Burberry's European business) have been key for the group's remarkable organic sales growth (which should be as high as 8% year-over-year for the second quarter). Besides, the company's leading digital media efforts and improving retail execution (with retail and wholesale margin expansion) make a long case even easier to make. Burberry's retail same-store-sales (maybe the most relevant figure in the business) are also remarkably strong. Analysts expect the company's same-store-sales to grow by as much as 18% year-over-year in the second quarter. Burberry, which is largely held by Cornerstone Capital Management , trades at 2014 20.5 times earnings, 10.8 times EBITDA and has no debt. With its market capitalization at just above $11 billion, the company could also be a M&A target for bigger luxury groups such as LVMH Moet Hennessy Louis Vuitton (LVMUY). Bottom line With global wealth still in its growth phase, great luxury goods companies still have up-side potential. Not only because they are bound to experiment top-line growth but also because the whole industry is still consolidating itself and the premiums paid are always large. A good example of this has been the recent sale of Loro Piana to LVMH. The French luxury conglomerate paid $2.6 billion for 80% of the Italian cashmere maker, valuing the company at 17 times EBITDA. Even when I like both Tiffany and Burberry, my favorite play among luxury goods companies is Tiffany. Customers are loyal to their jewelers and, hence, According to Credit Suisse, global wealth grew by 5% year-over-year, compared with a global decline of 5% in the prior year. Besides, according to the same research report, the US saw the biggest improvement, with wealth up by 13% thanks to the recovery in property prices and the on-going rally in equity markets. Moreover, the bank expects wealth to increase by 7% per year until 2018. With this in mind, here I want to take a look at my two top luxury equity ideas. Tickers in the article: TIF 0% BURBY 0% LVMUY 0% Download guru portfolio report (PDF format): Daniel Loeb (Updated on 10/17/2013) A Screener Endorsed by Warren Buffett without Knowing In a recent interview Warren Buffett mentioned three companies that he finds attractive. Out of the three companies he mentioned, two of them are listed in GuruFocus’ Buffett-Munger screener. Buffett-Munger Screener looks for high quality companies that are traded at fair prices, the kind of companies that Buffett buys and hold forever. The Model Portfolio of Buffett-Munger Screener has outperformed the market year-over-year. It is just one of the features provided with GuruFocus Premium Membership. Click Here to Try It Free! cheap tiffany & co Currently 2.00/5 1 2 3 4 5 Rating: 2.0 /5 (5 votes) cheap tiffany Subscribe via Email Subscribe RSS Comments Graemew - 5 days ago I like LVMH ....one of the reasons is that they have a porfolio of all kinds of luxury ranging from handbags to jewelry to watches to champagne to perfumes...so if one kind of luxury has a decline the others can make up for it. LVMH continually builds it brands and invests in new brands like Loro Piana and takes a long-term view rather than trying to meet annual goals. None of these luxury companies are currently cheap however, but I have been holding since 2009. Please leave your comment: tiffany and co tiffany jewelry outlet tiffany jewelry tiffany & co