Luxury You Should Own: LVMH Moet Hennessy Louis Vuitton SA (ADR) (LVMUY)

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As I mentioned before, given current market prices, buying Louis Vuitton Moet Hennessy over almost any luxury mono brand is a no brainier. When buying companies like Kors or Coach at P/E multiples of over 20x you are just paying too much for expected growth. Mono brands not only do not possess the market strength and distribution networks that a company like Louis Vuitton Moet Hennessy may have, but also they are not sufficiently diversified. One brand can go bust, maybe five brands can go bust on wrong strategic decisions but it’s very tough to get it wrong on more than 60 names. Louis Vuitton Moet Hennessy shares have risen 10% in the past year, reflecting how good the results have been but Kors shares have more than tripled since its IPO. If you are thinking of investing on luxury brands its best to go for the sure thing and buy Louis Vuitton Moet Hennessy.

The article Luxury You Should Own originally appeared on Fool.com and is written by Federico Zaldua.

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