Despite these impressive gains, Movado trades for a relatively low 13.6 times TTM earnings. Additionally, Movado has $168 billion in cash and no debt, which is perhaps even more impressive than Fossil’s stash, considering Movado’s market cap is under $770 million (Fossil’s is $5.8 billion). So, backing out the cash, Movado Group, Inc (NYSE:MOV) trades for just 10.6 times earnings.
Michael Kors Holdings Ltd (NYSE:KORS) is a larger and more diverse company, producing a full line of men’s and women’s apparel and accessories, including a line of watches that has grown tremendously in popularity over the past few years. The company trades at a lofty valuation of over 30 times earnings; however they have the growth rate to justify this. 2013’s earnings of around $1.86 per share are projected to rise to over $3.00 by 2015. I’m hesitant to invest in Kors; simply because I’m not sure that its high growth is sustainable, meaning that they are getting too big to grow at 20% a year for much longer. More about this in a future article…
While Michael Kors Holdings Ltd (NYSE:KORS) is a bit too expensive to look enticing to me, both Fossil Inc (NASDAQ:FOSL) and Movado seem very attractive right now, even after the strong upward moves in both companies’ stocks lately. The difference is that as a smaller, less diverse company, Movado is a bit riskier and more volatile. However, the cash piles on both balance sheets look pretty nice, as do the low valuations. If you believe (as I do) that the economy will continue to improve significantly for another few years, it’s hard to go wrong with either.
The article Fashion Watches Are Growing Fast: What’s The Best Play? originally appeared on Fool.com and is written by .
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