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Company name Fossil Group Inc
Stock ticker FOSL
Live stock price [stckqut]FOSL[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Poor
Sales growth Fair
EPS growth Good
P/E growth Poor
EBIT growth Good

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $59.95
Target stock price (averages with growth) $56.87
Target stock price (averages with no growth) $35.97
Target stock price (manual assumptions) $86.04

The following company description is from Google Finance: http://www.google.com/finance?q=fosl

Fossil Group, Inc. a global designer, marketer and distributer company that specializes in consumer fashion accessories. The Company’s offerings include a line of men’s and women’s fashion watches and jewelry, handbags, small leather goods, belts, sunglasses, soft accessories and clothing. Its products are distributed globally through various distribution channels, including wholesale in countries where the Company has a physical presence, direct to the consumer through its retail stores and commercial websites and through third-party distributors in countries where the Company do not maintain a physical presence. The Company operates in four different segments: the North America Wholesale segment, the Europe Wholesale segment, Asia Pacific Wholesale segment and the Direct to Consumer segment.

 

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in Fossil Group Inc as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns. I am removing this company from my Watch List as its performance doesn’t favorably compare to other investment options.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of Fossil Group Inc calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
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In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

  • Stock price at the time of the calculation: $85.67
  • Growth: 0.1
  • Current EPS (TTM): $7.17
  • P/E: 12
  • Future EPS Calc: $11.54
  • Future Stock Price Calc: $138.56
  • Target stock price: $86.04

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I hope that this makes you a Confident Investor.

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We look at Fossil Group, Inc. [stckqut]FOSL[/stckqut] a company in the Consumer Goods industry which traders have been highly interested in of late, to assess if it provides value for investors considering buying or selling it.

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The stock has an estimated 5 year annual growth of 10.31% and a PEG multiple of 1.15.

Rather than the usual Price to Earnings (P/E) multiple method, we use a slightly different method to assess if Fossil Group, Inc. is potentially a value buy for investors, the PEG ratio (P/E to growth). This PEG multiple takes into account the expected long term growth in earnings of the company rather than merely the growth for one earnings period ahead as forward P/E does.

That is to say, P/E simply doesn’t account for the long term prospects of FOSL. As a rule of thumb, a stock with a PEG of between 0 and 1 is usually considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of FOSL being 1.15, we consider Fossil Group, Inc. to likely be priced at fair value.

Source: Is there Value for Investors: Fossil Group (NASDAQ:FOSL) – Stock Markets Daily