Hershey Co (HSY), Lazard Ltd (LAZ), Tiffany & Co. (TIF): Three Contrarian Ideas You Should Take a Look At

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Where I disagree with most analysts


I expect high-end jewelry to offset targeted and structural declines in the company’s sub-$500 jewelry business and expect revenue growth of +8% to be sustainable. Besides, I see potential for margin expansion to a level above 20% given two current trends: a more favorable commodity cost environment, and a mix shifting towards more profitable businesses (more profitable regions such as Russia, where the company is taking over the distribution).
Trading at 2013 22 times P/E and 11 times EV/EBITDA, I think Tiffany & Co. (NYSE:TIF) offers one of the best alternatives withing luxury brands in general and global jewelers in particular.
Bottom line

The three companies named above are all well regarded by the “general consensus.” Nevertheless, I think they offer more opportunities than what the consensus expects from them. Above all in Hershey Co (NYSE:HSY)’s case I believe the market is not seeing the tremendous top line growth that can be achieved through the Chinese market. In Lazard Ltd (NYSE:LAZ)’s case, I think the market is under-estimating the ability of the bank’s management to boost margins through cost cutting. On the other hand, the market seems to be under-estimating Tiffany & Co. (NYSE:TIF)’s growth potential.

The article 3 Contrarian Ideas You Should Take a Look At originally appeared on Fool.com and is written by Federico Zaldua.

Federico Zaldua has no position in any stocks mentioned. The Motley Fool owns shares of LAZARD Ltd (NYSE:LAZ). Federico is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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