Tiffany (TIF) 2013 Review

Tiffany & Co is an internationally renown retailer, designer and manufacturer of fine jewelry, silverware, china, crystal and gift items. The company has grown profits and dividends at a 10-20% rate over the last 10 years earning a 14-19% return on equity.  While revenues and profits are impacted by economic activity, TIF has weathered difficult times well and should sustain an above average growth rate as a result of:

(1) higher sales made possible by rising capital expenditures in its distribution, manufacturing and diamond sourcing process,

(2) increased penetration in international markets,

(3)  expansion in new store openings,

(4) a growing customer base resulting from opening a line of new smaller stores    with lower priced, higher margin products,

(5) stock buyback program.

Negatives:

(1) earnings from its foreign operations are exposed to currency fluctuations,

(2) recent disruptions in foreign capital markets could impact its ability to financial future growth,

(3) its customers are sensitive to macroeconomic events.

TIF is rated A by Value Line, carries a 23% debt to equity ratio and its stock yields over 1.9%.

    Statistical Summary

                Stock       Dividend       Payout      # Increases  

                Yield      Growth Rate     Ratio       Since 2003

TIF            1.9%            7               36%              10

Ind Ave       .8                7*             25                NA 

                Debt/                      EPS Down       Net        Value Line

               Equity         ROE      Since 2003    Margin       Rating

TIF            23             16%           2                 12%          A

Ind Ave      22             17             NA               7              NA.

*many retailers do not pay a dividend.

     Chart

            Note: TIF made good progress off its March 2009 low, surpassing the downtrend off its October 2007 high (straight red line) and the November 2008 trading high (green line).  Long term, TIF is in an uptrend (blue lines).  Intermediate term, it is in a trading range (purple lines).  Short term, it is in an uptrend (brown line).  The wiggly red line is the 50 day moving average.  The Dividend Growth Portfolio owns a full position in TIF.  However, because the holding had grown to a size sufficiently larger than normal, the Portfolio Sold enough shares to reduce it to normal when TIF stock price touched the upper boundary of its intermediate term trading range.  The upper boundary of its Buy Value Range is $29; the lower boundary of its Sell Half Range is $105.

http://finance.yahoo.com/q?s=TIF

7/13