What Does Billionaire Dan Loeb See In Tiffany & Co. (TIF)?

Page 1 of 2

Several weeks after the end of each quarter, hedge funds and other major investors file 13Fs with the SEC, which are then disclosed to the general public. We track these filings, using the included information to help us develop investing strategies; for example, we’ve found that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about our small cap strategy). Of course, we also like to review filings from top managers such as billionaire Dan Loeb of Third Point to see what trades they were making. When we look at Third Point’s most recent 13F (see the full list of Loeb’s stock picks), we noticed that the fund initiated a position of 2.7 million shares in Tiffany & Co. (NYSE:TIF) between January and March. This made Third Point the largest shareholder of Tiffany out of the filers we track.

The $10 billion market cap jeweler and jewelry retailer grew its revenue by 9% in its most recent quarter (which ended in April, and was the first of Tiffany & Co. (NYSE:TIF)’s fiscal year) compared to the same period in the previous fiscal year. Comparable store sales were up moderately with some growth coming from an increased number of locations. However, with costs rising as well, earnings per share were only up by a penny to 65 cents. Sales growth occurred in all four major geographies, with the highest growth rate (of 15%) occurring in Asia-Pacific (a segment which excludes the much slower-growing Japan). Growth rates were also high in the Middle East, though that is still only a small source of business for Tiffany & Co. (NYSE:TIF).

Dan Loeb Third PointIts current market capitalization places Tiffany at 23 times trailing earnings, which seems aggressive considering how low net income growth was last quarter. Analyst growth expectations imply a forward P/E of 19, suggesting that investors are quite optimistic about the company’s prospects over the long term. We’d note that as a provider of jewelry Tiffany & Co. (NYSE:TIF) tends to be dependent on the prosperity of the overall economy, as shown by its beta of 1.9. Chilton Investment Company, managed by billionaire Richard Chilton, reported ownership of about 730,000 shares in its own 13F (find Chilton’s favorite stocks).

The closest peers for Tiffany & Co. (NYSE:TIF) are Signet Jewelers Ltd. (NYSE:SIG) and Zale Corporation (NYSE:ZLC). Zale Corporation (NYSE:ZLC) has risen over 250% in the last year, as the company has broken into the black. Its market capitalization is only about $300 million, but with a current price of over $9 and close to 700,000 shares traded per day there should be sufficient dollar volume. It trades at 23 times forward earnings estimates. Signet Jewelers Ltd. (NYSE:SIG) is somewhat closer to value territory than either Zale Corporation (NYSE:ZLC) or Tiffany, with trailing and forward P/Es of 15 and 13 respectively. With double-digit percentage increases on both top and bottom lines last quarter compared to a year ago, we think it is worth a closer look from investors.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!