Here's Why Signet and Tiffany Are Stock Gems in the Jewelry Group - TheStreet.com
The world loves an underdog story, and there are two stocks in the jewelry sector that offer hidden value: Signet (SIG) and Tiffany (TIF) .
Signet, which owns jewelry chains Jared, Kay and Zales, faces challenges, but they aren't as big as the 35%-plus drop in the stock this year would suggest.
Shares of jewelry retailer Tiffany, meanwhile, have lost more than 12.5% over the past year. Some analysts are expecting a dismal performance from Tiffany this year, but there is reason for optimism.
Investors should ignore the short-term hiccups. These two top jewelry stocks offer stellar wealth-making opportunities, so as Warren E. Buffett says, be greedy when others are fearful.
Signet, as the largest seller of affordable jewelry in the U.S., is a solid investment opportunity. The stock is cheaper by 35%, thanks to its recent weakness.
By employing a judicious mix of shrewd strategies, Signet has been able to emerge as a big player in the jewelry industry, which is fragmented and usually populated by smaller entities.
A disappointing second-quarter report from Signet last week spooked some investors, creating a rare opportunity for those looking to get in. However, the company's guidance for 2017 clearly indicates growth.
Although Signet said that same-store sales will plunge, net selling square footage is expected to grow 3% to 3.5%.
Signet remains a hit with its customers.
A survey conducted by Cowen indicates that customers have maintained their positive ratings on the retailer.
In fact, Signet will use this popularity and focus its advertising budget to drive traffic across its different brands.
In June, Chief Executive Mark Light said that the company is adding additional promotions in order to excite customers at its chains.
Reports of diamond-swapping practices did create a flutter, but Signet is using high-tech tools to get on top of the situation. The company aims to test new technology to help it endorse that the diamonds it sells are genuine.
