Fossil Watch: No Longer a Short

Just last night I received a signal from stockspotter recommending to exit a short position on Fossil (FOSL).   This trade earned 5.2% after 4 days.  Fossil is now trading at a 10-day which clearly illustrates the successful timing of the signal.  That said, I’m glad the short signal has been removed because, overall, I like Fossil as a long term investment.

Originally, I would never think to invest in a watch company.  I mean, I personally don’t wear a watch because I can check the time on my phone.  But, apparently, there’s renewed interest in the wristwatch as a fashion statement. Fossil is playing that trend well, with sales in the last quarter up 37%, generating profits 30% ahead of Wall Street’s forecast.

Fossil can offer ridiculously high-priced designer wrist candy with the best of the jewelers, but as CAPS member NEVERFADE notes, the company operates like a finely crafted Swiss timepiece when targeting the more affordable end of the market:

“Entry level watch company that makes quality, good looking products in the low priced to mid priced ranges. Popular in the U.S. and in China. Great way to play emerging middle class worldwide.”

Additional Company Info: Fossil, Inc. designs, develops, markets, and distributes fashion accessories worldwide. It offers a line of fashion watches under its proprietary brands, such as FOSSIL, MICHELE, RELIC, and ZODIAC; and through licensed brands, including ADIDAS, BURBERRY, DIESEL, DKNY, EMPORIO ARMANI, MARC BY MARC JACOBS, and MICHAEL KORS. The company designs, markets, and arranges for the manufacture of watches and accessories on behalf of certain mass market retailers, companies, and organizations as private label products or as premium and incentive items for use in various corporate events. It also provides various fashion accessories for men and women, including handbags, belts, small leather goods, jewelry, and sunglasses through company owned retail stores, department stores, and specialty retail stores, as well as over the Internet and through catalogs.

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