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Fossil Group, Inc. Message Board

  • araemrikian araemrikian Jul 28, 2002 9:41 PM Flag

    Fossil a Screaming Buy, right or wrong?

    Fossil is currently @ $18.34 with earnings expecations of 1.43 for next year, which gives it a forward PE of 12.8. Considering the growth rate over the next 5 years is estimated to be 18%. This company is selling at .71 times the earnings growth rate.
    Compared to the following for other consumer companies:
    Southwest Airlines--1.44
    Hott Topic--1.33
    Tricon globall--1.4
    Scrips howard--1.6
    Darden Rest--.88
    Cheescake Factory--1.1
    Fortune Brands--1.3

    My logic is if Fossil were to even sell at 1 times it's 5-year growth rate (18%), the stock would be @ $26!!!!!! an increase of 45% from current prices and thats conservative. Anybody else buy my logic if not why???

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    • It is hard enough to forecast next quarter's earnings, let alone growth rates. Growth in the restaurant industry is less volatile than growth in the fashion industry. On the positive side, there were a couple of companies in the fashion industry the past 2 days which beat estimates, and the rise of the Euro will help Fossil, although not so much in the short term due to hedging.

28.40-0.15(-0.53%)Oct 21 4:00 PMEDT