Analysis of Luxury Goods Sector
LVMH – Various products include LV, Celine Moet Chandon, Fendi, Dior, Hennessey, Verve Cliquot to name a few. Very diversified products
Price for price relative is on a 2 year high, although I do believe this is a very good stock I feel that it is a stock to hold until there is a dip.
Hermes – mainly silks and two different types of bags. A very exclusive brand and maybe a bit too exclusive with not enough products; only caters to a very small market. However, I find this one of the more interesting stocks out of the sector for a few reasons. In 2000, they decided to run their clothing department from China; LV increased their stake holding in the company even though Hermes asked them to release a percentage of their shares – potential buy out in the next few months. The stock however released their results recently which were above consensus and the share price rose dramatically last week. I personally feel that this stock is a good one to invest in but the question is simply whether or not you can get your hands on any of the free float – trading volumes are thin. Next dip I would buy in where possible.
Burberry – Burberry has been an interesting stock to follow over the past year, constantly exceeding consensus expectations. Although Burberry is categorised as a luxury good, it is at the more affordable end of the sector, so the question would be, if a double dip was to come would this be a stock that would plumit purely on a demand basis. The stock has really rallied over the past few weeks and has been justified with earnings upgrades over the year – barring bulgari looks to be the be the best performing stock in the sector, now with bulgari bought, it takes the lead. The stock however trades at a premium and with the rally I feel that it is best to hold off short term on this stock but follow with a keen eye.
Richemont – Owners of Cartier, Chloe, net-a-porter, montblanc and more. Another very diversified brand but catering for a
Price for price relative is on a 2 year high, although I do believe this is a very good stock I feel that it is a stock to hold until there is a dip.
Hermes – mainly silks and two different types of bags. A very exclusive brand and maybe a bit too exclusive with not enough products; only caters to a very small market. However, I find this one of the more interesting stocks out of the sector for a few reasons. In 2000, they decided to run their clothing department from China; LV increased their stake holding in the company even though Hermes asked them to release a percentage of their shares – potential buy out in the next few months. The stock however released their results recently which were above consensus and the share price rose dramatically last week. I personally feel that this stock is a good one to invest in but the question is simply whether or not you can get your hands on any of the free float – trading volumes are thin. Next dip I would buy in where possible.
Burberry – Burberry has been an interesting stock to follow over the past year, constantly exceeding consensus expectations. Although Burberry is categorised as a luxury good, it is at the more affordable end of the sector, so the question would be, if a double dip was to come would this be a stock that would plumit purely on a demand basis. The stock has really rallied over the past few weeks and has been justified with earnings upgrades over the year – barring bulgari looks to be the be the best performing stock in the sector, now with bulgari bought, it takes the lead. The stock however trades at a premium and with the rally I feel that it is best to hold off short term on this stock but follow with a keen eye.
Richemont – Owners of Cartier, Chloe, net-a-porter, montblanc and more. Another very diversified brand but catering for a