A Great Brand, Just A Bit Too Expensive: Tiffany & Co. (TIF), Amazon.com, Inc. (AMZN), Signet Jewelers Ltd. (SIG)

While I won’t recommend Amazon as an investment until its stock plunges by at least 50%, they are indeed a threat to monitor.  Amazon is actively trying to become a major player in the fashion world, moved up this year to the United States’ 20^th largest jeweler by sales to the 16^th (Tiffany is a close number three to leaders Sterling Jewelers and Wal-Mart).  While their annual sales of around $300 million in jewelry pale in comparison to Tiffany & Co. (NYSE:TIF) for the time being, their jewelry sales did increase by 17% just last year, and that growth can’t be ignored.

The main thing that Tiffany & Co. has that the others don’t is one of the most respected and recognized brand names in jewelry.  Few things can get a man out of the doghouse faster than the sight of a Tiffany & Co. gift box!

For this recognition and growth potential, the brand commands a premium. Tiffany & Co. currently trades for just over 20 times fiscal year 2013’s (which ended January 31) earnings of $3.21 per share.  While the consensus projects a forward growth rate of approximately 12% annually, I don’t feel quite confident enough in the company’s ability to grow as much as expected over the next few years.

After Europe gets its act together economically, since this is where Tiffany & Co. (NYSE:TIF) has the most near-term growth potential, I would be more willing to pay a premium.  For now, although I like the company and believe in it long-term, I would wait for a better entry point before making a move.

The article A Great Brand, Just A Bit Too Expensive originally appeared on Fool.com and is written by Matthew Frankel.

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