Copper is nearing an all-time high. The copper market has a nickname: “Dr. Copper”. That name comes from the old adage that copper has PhD in economics – when it’s hot, you can expect a strong economy on the way.
As we near the unleashing of another multi-trillion-dollar round of stimulus, it makes sense that copper has run so far. The vaccines appear to be working. The pandemic is almost behind us. Economic confidence is bubbling over.
The upshot is the potential for inflation on the horizon. But that also means a likely uptick in feelings of wealth among developed world populations. When we have seen such high economic confidence in the past, we have seen asset bubbles and surging demand for luxury products.
With that in mind, we take a look at a few interesting luxury goods stocks with momentum and active catalysts: Movado Group, Inc (NYSE:MOV), Signet Jewelers Ltd (NYSE:SIG), Sun Kissed Industries Inc (OTCMKTS:SKDI), and Tapestry Inc (NYSE:TPR).
Movado Group, Inc. (NYSE: MOV) trumpets itself as a company that designs, develops, sources, markets, and distributes watches in the United States and internationally. It operates in two segments, Watch and Accessory Brands; and Company Stores.
The company offers its watches under the Movado, Concord, Ebel, Olivia Burton, and MVMT owned brands, as well as under the Coach, Tommy Hilfiger, HUGO BOSS, Lacoste, SCUDERIA FERRARI, Rebecca Minkoff, and Uri Minkoff licensed brands.
Movado Group, Inc. (NYSE: MOV) recently announced that its Board of Directors has declared a cash dividend of $0.10 per share. The dividend is payable on February 5, 2021 to shareholders of record on January 21, 2021.
Commenting on the dividend announcement, Efraim Grinberg, Chairman and Chief Executive Officer, stated: “We are pleased to announce a cash dividend. Movado Group is committed to building long-term shareholder value and we believe this dividend declaration advances this objective. Since the onset of the COVID-19 pandemic, our team has intently focused on executing with discipline to strengthen our balance sheet, and as of third quarter end, we had accumulated $163.2 million in cash, reduced inventory and lowered debt. We believe the Board’s reinstatement of a dividend is a testament to our strong cash flow generation amidst this ongoing crisis and reflects their confidence in our strategy and future growth potential.”
In total, over the past five days, shares of the stock have dropped by roughly -3% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Shares of the stock have powered higher over the past month, rallying roughly 6% in that time on strong overall action.
Movado Group, Inc. (NYSE: MOV) pulled in sales of $174.1M in its last reported quarterly financials, representing top line growth of -15.3%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($163.5M against $133.4M).
Signet Jewelers Ltd (NYSE: SIG) is dead center in the luxury goods space. The company bills itself as the world’s largest retailer of diamond jewelry, and it represents the parent company to most of the world’s top jewelers.
The company operates approximately 2,900 stores primarily under the name brands of Kay Jewelers, Zales, Jared, H.Samuel, Ernest Jones, Peoples, Piercing Pagoda, and JamesAllen.com as well as digital marketplaces under multiple websites.
Signet Jewelers Ltd (NYSE: SIG) most recently announced the appointments of André Branch and Dontá Wilson to its board of directors, effective immediately. Their appointments will expand Signet’s board to 12 from 10 members, 11 of whom are independent, and will further position the company’s goal to reinvent how people browse, shop and purchase jewelry for all occasions.
“We’re thrilled to welcome André and Dontá to the Signet Board of Directors,” said H. Todd Stitzer, Board Chairman. “These dynamic, transformative leaders with incredible backgrounds and track records join Signet at an exciting time, and embody what we seek from our directors – agile mindsets, proven leadership and innovative thinking. I’m confident they will help fuel our work accelerating Signet’s digital-first, omnichannel transformation under CEO Gina Drosos’ leadership.”
If you’re long this stock, then you’re liking how the stock has responded to the announcement. SIG shares have been moving higher over the past week overall, pushing about 13% to the upside on above average trading volume.
Signet Jewelers Ltd. (NYSE: SIG) generated sales of $1.3B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 46.4% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.3B against $1.7B, respectively).
Sun Kissed Industries Inc. (OTCMKTS: SKDI) is now, according to recent company communications, SFLMaven, a high-end online jewelry retailer that brought in sales of nearly $11 million in 2019 and over $130 million since 2004 on a proven track record featuring strong revenues over seventeen years.
That track record looks to have held up in 2020, despite the challenging context for high-end retailers, and also set to ramp up in 2021, based on the company’s recent communications.
Sun Kissed Industries Inc. (OTCMKTS: SKDI) – aka SFLMaven – most recently announced data and analysis for the company’s 2020 operating performance as it successfully navigated a challenging macro context to post strong sales with accelerating growth into the end of the year.
Management believes SFLMaven’s 2020 revenues totaled approximately $7.5 million, which represents significant resilience in the face of powerful macro headwinds related to the Covid-19 pandemic health crisis and its associated deep economic recession.
“2020 was a great year for SFLMaven,” remarked Joseph Ladin, CEO of SFLMaven. “We are very encouraged by the resilience of our business model and market positioning in the face of extraordinary challenges impacting the high-end retail space, as demonstrated by overall strong metrics and clear evidence of accelerating growth into year-end, which should carry over into 2021 as the world prepares to reopen economically with huge fiscal and monetary policy tailwinds in place.”
Sun Kissed Industries Inc. (OTCMKTS: SKDI) just basically outperformed any reasonable set of 2020 expectations given its small size and its sector positioning and the deep recession we saw last year. We don’t have final numbers yet, but we can probably assume that $7.5 million in sales is pretty much where things will land for the year. The stock is now riding a strong upward trend, up as much as 350% since its transition into SFLMaven last year in November.
Tapestry Inc. (NYSE: TPR) operates through three segments: Coach, Kate Spade, and Stuart Weitzman. All of these segments sit at the heart of the luxury goods space.
It offers women’s accessories, including handbags, such as wallets, money pieces, wristlets, and cosmetic cases; novelty accessories comprising address books, time management accessories, travel accessories, sketchbooks, and portfolios; key rings; and charms.
Tapestry Inc. (NYSE: TPR) recently announced its participation in the Black in Fashion Council Active Allyship Pledge. Members of the Active Allyship program commit to joining together to secure the advancement of Black individuals in the fashion and beauty industry.
“We are proud to partner with the Black in Fashion Council and join them in their mission to ensure that Black individuals are represented and amplified in our industry,” said Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc. “We have committed to expanding diversity in our Tapestry and brand leadership teams. Working with the Council will help us to build upon the progress that we have made in achieving these goals.”
And the stock has been acting well over recent days, up something like 7% in that time. Shares of the stock have powered higher over the past month, rallying roughly 19% in that time on strong overall action.
Tapestry Inc. (NYSE: TPR) pulled in sales of $1.7B in its last reported quarterly financials, representing top line growth of -7.2%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($1.7B against $1.5B).
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