Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Tumi Holdings (NYSE: TUMI ) was up markedly today, reaching 23% gains early in the day before leveling off around 20% higher than yesterday's close thanks to a combination of strong forward guidance and subsequent analyst upgrades. The recently public upscale luggage maker reported its earnings last night, beating EPS expectations by $0.05 with an $0.18 EPS result. Tumi boosted full-year guidance by $0.03 on both high and low ends, from $0.64 to $0.67 in profit per share to $0.67 to $0.70.
So what: Analysts are clearly bullish on this company despite its premium valuation. Credit Suisse gave a very bullish recommendation after Tumi's earnings, saying that there may be less than 30% brand penetration and that Tumi could nearly double its market share from 7% to 13% over the next five years. That's no mean feat in a $4 billion global market, especially in a period of intense economic uncertainty.
Now what: Today's big pop reverses a summertime slide that had taken Tumi from a post-IPO closing range of more than $26 to less than $16. This news could be the catalyst for a sustained period of growth, but it would be small-f foolish to ignore the churning of the global economy. This is one stock to keep a close eye on, and a personal visit to one of Tumi's 1,800 outlets might offer more direct feedback for anyone still on the fence about this retailer.
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