LVMH (Moet Hennessy Louis Vuitton) (LVMUY)

Diversified, high-luxury company. Toll road for high luxury, and that runs through China (1/3 of its customer base). A clean, quality, Chinese consumer proxy. More to go if you think the China stimulus is real. (Price target in euros.) Yield is 1.9%.

If the Chinese stimulus is not that effective, he's less positive on it, as that's this stock's biggest driver. It is a higher-risk proxy, but his other Top Picks are low beta to compensate.

She trimmed it a while ago. It's been terrible all year. There's no more pent-up demand. The aspirational buyers happened during the pandemic when consumers were flush. This will struggle for a little while.

Will continue to hold. Believes company is very high quality. Luxury market will always remain. High income earners will always have capital to spend on high end goods. Price "in-sensitive" shoppers will always exist. Large amount of brands that will always be strong. 

Enjoys big gross margins, but shares have fallen because consumers, notably China, have slowed down in a slow post-Covid recovery. But this is priced into the stock now. LVMH continues to grow their brands, the best in luxury. Tiffany will benefit them in the next little while. They continue to innovate.

Has a solid, long-term track record and has done well for him. Luxury goods weather recessions well; the rich get richer in recessions.

Chart shows how stock's come off. Behemoth in luxury goods. Very well positioned. Reported results a week ago, most of the stock move was already baked in. Great track record of executing through slowdowns. Trades at only 20x earnings; cheaper than COST or WMT, but with higher growth over the long term because of positioning and superb margins. (Price target in euros.) Yield is 2.1%.

Thinks stock can be up 20% over next 12-18 months. 

Great until middle of last year, when things turned against it. Lots of concerns about economic rebound in China, geopolitical tensions. More beta, as it's consumer discretionary. Leader in the space. Long-term secular growth, as we'll see continued growth of wealth in developing countries, demand for these products, and urbanization. 13% earnings growth.

A long-term winner. They dominate the luxury space. Will their growth slow, is the only caveat.

Really likes luxury market long term, given growth of wealth in developing countries. Struggled in back half of 2023 due to concerns about rebound in China. Now doing well, luxury market is producing resilient numbers. Still looking at 13-15% earnings growth. Smart acquirers. Clear leader in luxury consumer brands.

Worries over a weak Chinese (and global) consumer are already reflected in the share price. He owned this a long time ago and he wants to buy it back. LVMH boasts a long track record of stability and growth. Also, their brands command pricing power. Return on capital is a consistent and attractive 15%, and steadier than the luxury sector. They can grow revenues around 9%. and drive 13% EPS growth.

Worries over sluggish Chinese economy. Outperformed the MSCI World Index since 2008, but struggling the last 8-9 months. Middle class wealth will continue to grow over time. Clear leader in luxury market, fine longer term. Bouncing off long-term 200-week MA, a significant technical. Forecasting 13% EPS growth for several years. 

Believes excellent company for long term investor. 10 year total return is ~22% annualized. Luxury sector has consumers weather recessions better than lower end retail outlets. Excellent management teams with strong brand values. 

Global leader in luxury with best portfolio of brands under ownership.
Very resilient business with diversification across business lines.
Fashion and leather goods - engine of profits.
Higher-end consumers not under pressure.
China lifting ban on group travel will also help.

It has been stellar for the last couple of years and he wished he had held it longer. However don't chase it - buy on weakness.

Core holding. One question is the succession. Current CEO is one of the best operators in the market he's ever encountered, would be difficult to replace. Best portfolio of luxury assets. Navigated through Covid. Insane pricing power. Operating margins at record highs. Great execution and brand strength.