Tiffany agreed to add three independent directors in an agreement with JANA Partners LLC and Francesco Trapani, which own 5.1% of the company. Trapani will be joined by Roger Farah and James Lillie on the board of directors in the hopes of reigniting some growth in the company. Revenue has been on the decline the last couple of years, and JANA and Trapani felt a change of leadership is in order, especially with a CEO search under way.
The move last month was speculation that the new leadership team will be able to boost growth. But there's no fundamental improvement yet, so investors will have to see how any potential change in strategy plays out.
Tiffany's shares have surged on the back of the board changes and a rising market overall in 2017. But shares now trade at 25 times trailing earnings, and if there's any decline in the macro economy or markets overall that could end up looking very expensive in hindsight. I'd like to see how management is planning to grow the company long-term before getting too bullish on the stock. Tiffany is a great brand for investors to own, but with so much good news priced into the stock I'm afraid now isn't the time to be loading up on shares.