November 28, 2012
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: Shares of luxury watch-maker the Movado Group (NYSE: MOV ) jumped as much as 10% today after issuing a special dividend and raising guidance in its quarterly report.
So what: Like many companies are doing in anticipation of the fiscal cliff, Movado issued a one-time payout of $0.75 to shareholders for Dec. 21, which brings total dividends to $1.45 for the year. As for the earnings report, Movado, which also sells watches under other luxury brands, including Lacoste and Hugo Boss, posted a 12% increase in sales and a 46% gain in adjusted operating income. CEO Rick Cote touted the company's "strong cash flow generation and sustained positive momentum," and management also boosted fiscal EPS guidance from $1.40 to $1.50 a share.
Now what: Shares have Movado have increased by about 600% since bottoming out during the recession, and the company appears to be fully healthy after suffering through losses during the downturn. Movado has a strong brand and stable growth and is eager to return capital to shareholders. This looks like a solid bet going forward.
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