Fossil, Inc. (NASDAQ:FOSL)

has outperformed it for the last year
good P/E

Hidden Gem

This company along with other watch maker belong with the dinosaur. In the 21st century no one will need to wear a wacth, because we have cell phone, PDA, and i don't know what other gadgets people will come up with next, but it will not be another watch.

I think this is a good short term play on valuation. However, like UNH, this is a value trap.

this baby is going up up up

HG trading near 52 week low.

Go with the flow

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Stock took a hit after latest earnings but I think the shortfall is short-term. Good returns on its business, lots of cash, good products, strong international presence.

Fossil took a hit last year after the SEC launched an investigation. Now that they're in the clear the stock is ready to take off. Fourth-quarter net income increased an impressive 51.4% to $53.1 million, or $0.75 per share. Net sales increased 18.5% to $463.1 million. In even more heartening news, gross margin surged, increasing to 53.6% from 51.4% in the year-ago quarter. It's got $267.9 million in cash and equivalents, and just $3.5 million in long-term debt. It's at 33 now and I expect it at 43 in the the not too distant future.

I agree. I have heard that sales of watches are down 15 to 20% in the US and flat to slightly down in Europe. Big department stores are purchasing less Fossil watches and watch makers are asking their suppliers to hold parts until April. Who wants to buy a $100 watch when they are about to lose their home and can't put food on the table. Fashion watches are very volatile in a recession. Take profits before poor earnings are released. The stock is up big over the past 2 years... and has a long way to fall, especially as Swatch retaliates and Movado and other US watch makers move into Europe pressuring international growth for Fossil. Exchange rates are starting to swing the other direction which will hurt the company. Look at Tiffany earnings, Zale Corp, or any other jewelry / watch maker and you will see it is a tough environment. FOSL still trades at a premium to its peers on a multiples basis so valuation downside exists...

S sm cap growth 11-16-07

Good earnings consistently.

If these guys can get anywhere close to their medium term earnings forecasts, they will be in for a huge move. Looks to me like they are just largely "unconsidered" and "undiscovered."

new product line, and consistently increasing profit margins

The introduction of more innovative styles and better product positioning is driving improved demand for Fossil brand watches in the U.S. Also the company’s growth strategy that focuses on diversification of product offerings, opening of new company owned stores, selective brand acquisitions, and international expansion is gaining momentum.

During the recent quarter, revenues increased by 15% to $304.8 million on account of higher sales from Europe and other international segments. Gross profit have been improved by a healthy 17.4% due to improving margins attributed to higher-margin retail and international sales besides Fossil’s efforts to trim down product costs. The company made further progress regarding inventory management goals, reporting a 7% reduction in inventory versus a year ago, despite an increase in company-owned retail locations.

The company in the previous year end has entered in a joint venture with Rajesh Exports called Fossil India and would be engaged in manufacturing, distribution, retailing and outsourcing of watches arid lifestyle products including jewelry. This would reduce cost and improve margins apart from increasing the operations over the globe.

In 2007, company’s domestic wholesale business is anticipated to benefit from the increased selling of premium watches and Fossil brand accessories due to increasing use of catalogs and internet to promote the brand. Besides it is expected to rollout new offerings to support strong domestic wholesale sales of Fossil brand accessories and mass-market sales of Relic brand and private label watches, jewelry, and accessories. Also the net sales growth is estimated in the lower double-digit range for the remainder of fiscal year 2007 and expects continued gross margin improvement on a y-o-y basis which also raises positive signs.

Broke out of slump, is going for a run

Bland products and a bland brand. Too much to pay for limited growth prospects at a time when discretionary spending is peaking.

Reasonable PE, improving fundamentals,strong chart pattern

too many people are calling the stock top out as the stock make new highs...a bullish sign