Robert Stovall Tiffany & Co. New TIF-N TOP PICK Dec 10, 2004

2009 was the trough, or the worst year ever. Luxury spending is starting to rise again. They are trying to expand into the emerging markets as well. They are under penetrated in the emerging countries. We have things like the Walmarts in the emerging sectors, but not the luxury areas.

Luxury goods sector has been the big outperformer among the retailers, while the middle American stocks get absolutely whacked. The real question is how much more expensive jewellery can people buy as well as how much more the international expansion can continue, as this obviously has been a big driver. Not cheap. When you get an economic pull back, people are less willing to spend on conspicuous consumption, even when they can afford to.

Likes the luxury area. When you are talking about emerging markets, specifically China, moving from more of an infrastructure to a consumption story, this is one of those names that you want to look at. Trading at 21X earnings with a low double-digit long-term growth rate. On his radar right now but in the consumer space he prefers others.

Estee Lauder (EL-N) or Tiffany & Company (TIF-N)? 2 very different companies and you would invest in each of them for different reasons. This one is a fantastic retailer and more of a valuation story than anything else. Really likes the profile of the company and what it is doing. Expansion into Asian economies as well as further expansion into the US and broadening its product line is going to be the trend for them. At these levels, it could be a core holding if you like the luxury sector.

This would have a seasonal pattern similar to the retail sector, which tends to do well coming into Black Friday. Most diamonds tend to be consumed at this time of year. You want to get in before that starts to happens, before consumption starts taking place. Technically that would be right about now. Chart shows it is heading down so he would wait until it showed some signs of strength. Seasonally, this would be the period for that.

Has never owned this. The stock tends to do really well when the economy is booming. Stock has fallen back and she is not sure why, but it may have something to do with the Japanese economy being weaker which would have reduced sales. It is probably not an inherent problem. This tends to be a higher multiple stock, and if they don’t meet expectations, it pulls back.

No earnings growth and a stiff multiple. There are better places to put your capital. There is a wall of sellers.

It has been a tough, tough time because of the strength of the US dollar. Last week they released disappointing earnings. Longer term it is a good company, well managed and gaining market share. He would shy away while the US$ is the dominant currency.

Recently reported earnings which were lower on a number of factors. A higher US$ impacted tourism spending in the US. Have most of their stores in the US. Just announced a share buyback. As the US$ stayed high, he worried about their continued earnings growth, but it has actually come down. You may want to watch for the next earnings before getting back in. Dividend yield of 2.6%.