Almost exactly 4 years ago I pondered shorting luxury stocks in 2 posts.
Part 1 – Idea Generation
Part 2- follow up
The only stock I actually shorted was Prada and I gave up 1 year later as the stock strongly went against me.
Back then, I divided (totally arbitrary) a “peer group” of luxury stocks into 2 sub groups, “tier 1” and “tier 2” brands. Let’s look how those stocks performed over the past 4 years:
This is the 4th post in what developed into a kind of “Watch series”, see Fossil part 1 and part 2 plus Movado.
Swatch is the largest wrist watch producer in the world. The company is the brainchild of legendary founder Nicholas Hayek who turned around the whole Swiss Watch industry and created Swatch out of insolvent Swiss watch makers.
This is a follow-up to my first post on Fossil. The short summary:
Fossil has a good but not great business with some issues, among others the potential success of smart watches. The reason to dig deeper was the unusual combination of CEO/owner with zero salary and capital allocation with a focus on share buy backs.
Share buy backs
There is a great collection of articles on Teledyne and Henry Singleton “available at CS Investing. One absolute gem inside is a classification of stock buy backs in order of usefulness to shareholders from Hedge Fund Honcho Leon Cooperman: