During the second quarter First Eagle Investment (Trades, Portfolio) nearly tripled its stake in Tiffany & Co. (TIF).
Tiffany & Co. has a P/E ratio of 19.31, a P/B ratio of 2.88, a market cap of $8.48 billion and a quick ratio of 1.67.
Tiffany & Co. began its operations when Charles Tiffany borrowed $1,000 from his father in 1837. With this investment capital, Tiffany and his school friend, John B. Young, set up a small stationery and gift shop in New York City. During the first three days they had a grand total of $4.38 in sales, but they were determined to succeed, and they refused to give up. Two years later they were still in business, selling glassware, porcelain, cutlery, clocks and jewelry. In 1841 the company began manufacturing jewelry, and in the early 1950’s the company was reorganized under the name Tiffany and Company, and it began expanding its operations to Paris and London. The company has since expanded throughout the Americas, across to the Asia-Pacific, Japan and Europe. Today Tiffany & Co. has more than 300 stores and 12,200 employees worldwide.
According to GuruFocus, Tiffany & Co. has a 7 of 10 financial rating with a cash to debt ratio of 0.72, ranking it beneath 55% of the 938 companies in the global luxury goods industry. The company has an operating margin of 17.97%, ranking it above 93% of the companies that are in its industry.
It’s likely that First Eagle Investment (Trades, Portfolio) Management LLC was influenced to triple its stake in Tiffany & Co. because the company has good financial numbers, is expanding its operations, and the company’s market price has declined by 25% over the previous year. This created an opportunity for First Eagle to allocate its stake at a significant discount to where the company was trading at last year. Tiffany & Co. also has a dividend yield of 2.45 and a quick ratio of 1.67, meaning that the company has good short term financial strength and is not in danger of filing for bankruptcy.
Below is a Peter Lynch chart that shows Tiffany & Co. is trading above its intrinsic value.
First Eagle Investment (Trades, Portfolio) is an independent investment firm that was founded in 1864. First Eagle likes to focus on a long term value investing strategy when it purchases securities. The investment firm currently owns 356 stocks in its portfolio with a total value of $39,252 million.
Cheers to your investment success.
Disclosure: Author does not own any shares of this company.
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