Ken Fisher (Trades, Portfolio), a San Francisco native who is the son of legendary investor Philip A. Fisher, sold out his stake in the Movado Group (MOV, Financial) during the fourth quarter.
The Movado Group has a market cap of $622.63 million, a price-earnings (P/E) ratio of 16.66, an enterprise value of $460.87 million and a price-book (P/B) ratio of 1.32
The Movado Group designs, manufactures and distributes watches from some of the world’s most recognizable brands including Movado, Concord, EBEL, Coach, Hugo Boss, ESQ Movado, Juicy Couture, Lacoste, Tommy Hilfiger and Scuderia Ferrari. The company has over 100 years of operating experience; it was established in La Chaux-de-Fonds, Switzerland in 1911.
According to GuruFocus the Movado Group has an 8/10 financial strength rating with an equity-asset ratio of 0.75, an interest coverage ratio of 40.88% and a Piotroski F-Score of 7 indicating the company is in a healthy financial situation.
The Movado Group also has an 8 of 10 profitability and growth rating with an operating margin of 10.28%, a net margin of 6.67%, a return on equity (ROE) of 8.28%, revenue growth (three years) of 8.30% and earnings per share (EPS) loss (three years) of 5.10%.
It is possible that Fisher decided to sell out his stake because the company’s revenue per share has slowed significantly in the previous 12 months.
The average revenue per share growth rate of Movado Group was 0.10% per year during the previous 12 months. Over the previous three years, the average revenue per share growth rate was 8.30% per year. During the past five years, the average revenue per share growth rate was 9.40% per year.
It is possible that Fisher believed the Movado Group was losing momentum.
Fisher purchased his stake during the second quarter of 2012 for an average price of $26.29. He sold out of his remaining 32,980 shares of the company for $25.77 losing an estimated 9% on his investment.
Since Fisher sold out his stake the Movado Group’s market price has gained an estimated 5%.
Below is a Peter Lynch chart that shows the Movado Group is trading above its intrinsic value.
Disclosure: Author does not own any shares of this company.
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