Why Tumi Will Underperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, travel products company Tumi Holdings (NYSE: TUMI  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Tumi and see what CAPS investors are saying about the stock right now.

Tumi facts

   

Headquarters (founded)

South Plainfield, N.J. (1975)

Market Cap

$1.5 billion

Industry

Accessories and luxury goods

Trailing-12-Month Revenue

$378.7 million

Management

CEO Jerome Griffith (since 2009)

CFO Michael Mardy (since 2003)

Trailing-12-Month Return on Equity

21.8%

Cash/Debt

$16.4 million / $52.0 million

Competitors

Coach (NYSE: COH  )
LVMH Moet Hennessy Louis Vuitton
Samsonite International

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 66% of the 29 members who have rated Tumi believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star BlacknGold, succinctly summed up the bear case for our community:

Tumi is worth about $300 million on paper and over $1.5 billion on the market. Most of its shareholders' equity can be attributed to its $338 million IPO. Income is up, revenue is up, valuation is up. As with software companies, I usually stay away from retailers because I honestly have no idea how to value them. I just think this is a bit overvalued.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 27, 2012, at 3:48 AM, Craigsale wrote:

    I dont see 180,000 plus ratings on this. Only about 25 active users following this. Where do u get that number? Thx

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