Schaeffer's Market Observation Features Tiffany & Company
CINCINNATI, Dec 18, 2003 (BUSINESS WIRE) -- Today's Market Observation features Tiffany & Company (NYSE:TIF). Schaeffer's Market Observations are market-based reports that provide insight and analysis from a unique and unbiased perspective. Market Observations are published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. To receive a free email notification each time a new commentary is written about one of the featured stocks or any of your favorite stocks, click on the following link. www.schaeffersresearch.com/addinfo.
Tiffany & Company: Another Blue Christmas?
"Come and trim my Christmas tree
With some decorations bought at Tiffany's
I really do believe in you
Let's see if you believe in me
Boo doo bee doo
"Santa baby, forgot to mention one little thing, a ring
I don't mean a phone
Santa baby, and hurry down the chimney tonight
"Hurry down the chimney tonight
Hurry down the chimney tonight"
written by J. Javits and P. Springer
originally sung by Ertha Kitt
It seems that many women across the country will be delighted to find gifts from Tiffany & Company (NYSE:TIF) under their Christmas trees as luxury-goods retailers appear to be back in vogue this year. In mid-November, the company reported third-quarter same-store sales that rose 16 percent. The firm met the Street estimate of 19 cents per share for the quarter and boosted its year-end earnings outlook. According to Zacks, TIF is slated to report earnings on February 25, with analysts expecting a profit of 69 cents per share - 15-percent improvement over earnings for the same period a year ago.
Technically speaking, the shares have outperformed its peers in the S&P Retail Index (RLX) since September 2002. From February through November, the security has rallied almost 130 percent to a new all-time high at 49.45, using the steadfast support of its 10-week moving average. Recently, the security has pulled back to test support at its 20-week trendline. A bounce off this intermediate-term moving average could help to send the shares sharply higher.
Click the following link to see the Weekly Relative Strength, TIF vs. RLX, since August 2002: www.schaeffersresearch.com/wire?ID=9108.
Click the following link to see the Weekly Chart of TIF since January 2003 with 10-Week and 20-Week Moving Averages: www.schaeffersresearch.com/wire?ID=9108.
Considering the equity's strong technical and fundamental history, I was surprised to find that investors weren't brimming with good cheer. The equity's Schaeffer's put/call open interest ratio of 1.93 is higher than 98 percent of those taken over the past year. However, options are lightly traded on this security and there is a heavy build-up of deep out-of-the-money puts skewing this reading. What caught my eye, though, was the increase in the ratio from its December 15 reading of 1.65 to its current high level.
And while short interest shrunk by eight percent in November, there are still more than 5.7 million shares sold short. At TIF's average daily trading volume, it would take more than five days to cover these positions. A resumption of the equity's rally higher could find additional fuel as short sellers are forced to buy back their bearish bets.
Only Wall Street is enamored of TIF. According to Zacks, 12 of the 16 analysts following the firm rate it a "buy" or better, while two rate it a "hold" and two rate it a "sell."
Traders should keep an eye on the stock's 20-week moving average, as it could help to launch the security higher while added support comes from the covering of existing bearish bets.
The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Midday Report, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. www.schaeffersresearch.com/addinfo.
About Schaeffer's Investment Research (www.SchaeffersResearch.com)
Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, www.SchaeffersResearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: www.SchaeffersResearch.com/method.
SOURCE: Schaeffer's
CONTACT: Schaeffer's
Tom Godich, 513-589-3800
releases@sir-inc.com
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