Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Tiffany & Co. (TIF), Blue Nile Inc (NILE), Signet Jewelers Ltd. (SIG): Does the Blue Box Still Have Room to Run?

Tiffany & Co. (NYSE:TIF) is known for its feature in the 1961 film Breakfast at Tiffany’s , and its 5th Avenue flagship store. Its key New York City store is more of a novelty and tourist attraction these days, but the company’s blue boxes remain recognizable worldwide, and Tiffany itself is one of the market leaders when it comes to fine jewelry .

Tiffany & Co. (NYSE:TIF) has been on a tear over the past five years, up over 100%, compared to the S&P 500’s near 30 % run, but can this blistering growth continue? As the number of “wealthy” households increases thanks to a rebounding economy, and as Asia becomes a viable market for high-end jewelry, Tiffany should continue to reward shareholders nicely.

Blue Nile Inc

In the $33 billion fine-jewelry industry, Tiffany owns some 5.5% of the market. While Tiffany tends to cater to the ultra high-end market, the likes of Blue Nile Inc (NASDAQ:NILE) and Signet Jewelers Ltd. (NYSE:SIG) cater to the lower-end markets.

Blue Nile Inc (NASDAQ:NILE) burst onto the scene back in 1999 and has been changing the jewelry retail game every since. The online retailer has been offering consumers a low-cost, convenient, one-stop shop for buying jewelry. Yet, over the last five years, Blue Nile Inc (NASDAQ:NILE) has managed to see earnings decline at an annualized 11 %, while Tiffany has managed to grow EPS at an annualized 16% over the same time period .

Meanwhile, Signet Jewelers Ltd. (NYSE:SIG) is the market leader in the jewelry business, owning about 10% of the market . Signet owns the market for good reason: it caters to the middle market. Chances are, even if you’re not married, you’ve seen one of Signet’s stores; the company operates well-known brands Kay Jewelers and Jared The Galleria Of Jewelry .

Why Tiffany can move higher

Tiffany’s America segment accounts for around half of revenue. But the Asian segment marks the growth story; the segment makes up 20% of revenue. Company wide same-store sales were up an impressive 8% in 1Q 2014, with Asia leading the way; same-store sales for Asia advanced 21%.

While e-commerce is all the rage these days, retail is still a part of Tiffany’s model, with the company planning to open some 16 stores in fiscal 2014. Again, enter Asia, where the majority of the stores will be opened; seven, to be specific. Part of the reason that Tiffany still believes in retail is that buying high-end jewelry, especially engagement rings, continues to be an intimate process, and therefore one that is best done in person.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.