Fossil, Inc. (NASDAQ:FOSL)

Technicals looks good. 20% upside from $95 over 3-4 months.

Do you try to catch the falling knife??????

NO THANKS!!!!

I am a fan of Fossil watches and other products. I think they have a good outlook.

HG

Way, way oversold. This stock has been on fire for two years, and this is a major chance to get in. IBD shows trading volume is huge the last few days, suggesting that the "smart" money, the pros, are moving back in. I'm buying in real life right after I put the period at the end of this sentence. Or this exclamation point!

Earnings growth.
TTM ROE = 27.22.
Total Debt to Equity ratio = 0.01
CEO with company in some form since 1988, owns stock.

FOSL lost over 23% yesterday on no news and then over 18% today after they reported earnings and Revenues that met and exceeded expectations because they basically lowered guidance to about $4.40 - $4.50 per share in earnings vs expectations of $4.61. This over 40% haircut is overdone. This is the same company that just reported Revenue growing at 35% and by the end of the year their P/E will be about 17 for a company growing at about 20% a year for the next several years.

My caps price is 112.36 which gives them a PE ratio of 27.41. This isn't so high considering their TTM sales grew 41.4% to $2.17 billion. TTM earnings were $4.10 up 75% from last year. In the past, they have been hurt by recessions and I think that is why the price has dropped from their high of the year of $134.98. I think they will march right back up in time.

The real driver of growth in my opinion is their direct to consumer segment. They have 362 stores.
Jennifer Pritchard retail division president said, “Our objective is to be as big as we can be.” Over 50% of new fossil stores will be in Europe as will half of their accessory stores. Growth has been excellent there and there is less competition.

They reported in their last quarter that their Direct to Consumer sales rose 28%, driven by a comp store sales increase of 21.3%. If they can continue that pace, the holiday season should be a very good one.

They make excellent cash flow - TTm cash flow was $156.68 or $2.42 per share
They have about $355 million in cash and $9 million in debt

They report on August 9, 2011. I think it will be a good report

Inexpensive luxury. Just what the economic downturn ordered.

Entry level watch company that makes quality, good looking products in the low priced to mid priced ranges. Popular in the U.S. and in China. Great way to play emerging middle class worldwide.

Overpriced

FOSL has one of the best balance sheets I have seen. They have a pile of cash, zero debt, high net margins, and a high return on equity. On top of all of that, they make really cool and durable stuff.

insider ownership

Retail is slowly growing and with the resurgent economy building, retail will be a big part of it.

Stock has had a HUGE runup, and will need to fill the recent gap

outstanding growth story. just starting to grow, plenty more to come. extremely attractive valuation.

6.36 cash per share, gross margins increased 4.5%, operating expenses decreases, net income increased 230% over first 6 mths 2009 net sales increased 166%. With the US consumer coming around again, combined with increased Asian and European sales, look for margins to increase again. Good brand and well run company. Third quarter 2010 will be a monster!

Momentum and Fundamentals

Lot of good brands and priced well for potential growth ahead.