If You Appreciate Designer Bags, You're Contributing to the International Market

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Nov 24, 2014
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What would the holidays be without the finer things in life? The Fendi bag wrapped in a beautiful, black-and-silver box with a big bow on top, or the Sephora makeup used to get ready for the annual office party, which will be serving Moet & Chandon, to celebrate a prosperous 2014 and many years to come. Maybe you'll be counting down the seconds until the new year hits from your dashing Bvlgari watch. Who knows?

What do these companies have in common? They are all under the Louis Vuitton Moet Hennessy (LVMH, Financial) umbrella, a family of French companies, with Christian Dior as the main holding company. It is listed on the Euronext Paris exchange.

Although this company is part of the European market, many upper-class U.S. citizens indulge in these products regularly, as they are sold in department stores like Nordstrom and Neiman Marcus.

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This chart shows the company's revenue in relation to net income.

The stock is currently priced at €144.30 and is ranked 4.5 stars out of 5 on our ranking system.

We see that the company’s margin is expanding, which is typically a good sign, but what investors need to watch out for is that LVMH has issued €3.2 billion in debt over 0.75 years. The company’s assets are also building faster than its revenue growth rate, which usually means that the company is growing less efficient, in our opinion.