saying that investors should bail out of Tiffany & Co

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saying that investors should bail out of Tiffany & Co

Post  yzf983221 on Sat 02 Jun 2012, 2:36 am

A second consecutive earnings miss and a worrisome outlook for high-end specialty investors has Charles Rotblut, editor of AAII journal, saying that investors should bail out of Tiffany & Co. He made the retailer his “Sell of the Week” on MoneyLife with Chuck Jaffe.
Tiffany /quotes/zigman/243577 /quotes/nls/tif TIF -0.21%reported first-quarter earnings at five cents below expectations and that sales growth also was beneath expected levels, which forced the company to cut its guidance, Rotblut said.
That problem is likely to get worse before improving, Rotblut noted, citing a MasterCard survey that shows jewelry sales as taking a downturn last month and sales of luxury goods stagnating.
“I happen to like Tiffany and think it’s a well-run company,” Rotblut said, “but if overall spending drops, there’s little that a company can do. … The opportunity costs for investing in Tiffany – particularly until the environment improves – are definitely going to be negative. You are better off allocating money to other stocks than trying to wait this out.”
Rotblut noted that “the bad news has been priced in, but you are looking at a valuation that is in line with historical averages,” so that the valuation on the stock is not favorable despite the declining numbers.
On Tuesday, Rotblut made Cabot Corp. /quotes/zigman/221010 /quotes/nls/cbt CBT his “buy of the Week.”
You can listen to the interview at tiffany and co .

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