What happened 

Shares of jewelry giant Tiffany & Co. (NYSE:TIF) jumped 16.7% in February according to data provided by S&P Global Market Intelligence after a board shakeup ignited hope in a recovery for the brand. 

So what 

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.

Worker examining a pile of diamonds.

Image source: Getty Images.

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. 

Now what 

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. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.