Fossil Group Inc (FOSL), Movado Group, Inc (MOV): One Timely Stock You Need to Watch

Competition

Fossil’s competitors are other watchmakers such as Movado Group, Inc (NYSE:MOV) and Swatch (OTC:SWGAY).

Movado Group, Inc (NYSE:MOV) makes fine watches for wholesale and retail markets. The company sells its watches through brand-name retail stores such as Coach, Tommy Hilfiger, and Lacoste, as well as through independent distributors. Movado Group, Inc (NYSE:MOV) recently had a good first quarter of its fiscal 2014, with sales increasing 6%, and an 18% increase in operating income to $10 million.

Swatch also sells watches and jewelry through brand-name retail stores. The company recently had impressive quarterly earnings growth of 26.8% on revenue growth of 15.1%. The company trades on over-the-counter markets and does not have as much information available.

Between Fossil and Movado Group, Inc (NYSE:MOV), Fossil has a slightly higher gross margin of 56% compared to Movado Group, Inc (NYSE:MOV)’s 54%. Fossil also has a lower PEG ratio of 1.25 versus Movado Group, Inc (NYSE:MOV)’s 1.68. This shows that Fossil is a better value for its growth rate and that it will retain more of its growing sales.

Conclusion

Fossil Group Inc (NASDAQ:FOSL)’s international growth and brand recognition led the company to crush analyst expectations during the past quarter. In the excitement of the positive earnings report, the stock price has shot up, and Fossil is now trading at 21.52 times earnings. I believe the company has a good future, but I would wait for the stock to pull back a little before buying.

The article 1 Timely Stock You Need to Watch originally appeared on Fool.com and is written by Ben Popkin.

Ben Popkin has no position in any stocks mentioned. The Motley Fool recommends Fossil. The Motley Fool owns shares of Fossil and Movado Group (NYSE:MOV). Ben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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