So when did this happen? When did Tiffany (NYSE:TIF) actually start looking like it might . just maybe. get cheap? Actually, it looks like the last time I wrote about this high-end jewelry retailer (Nov. 30) was near the top of the recent move. Since then, it's been a jagged ride down.

You can take your pick of reasons why people might be fleeing Tiffany. Retail performance in general has been spotty, and perhaps investors feel that the combination of higher precious-metal prices, higher interest rates, and a general feeling of impending economic malaise will be too much for Tiffany to surmount. Yeah, and maybe I'll grow fairy wings.

Truth be told, sales are a little rougher in the U.S., and that didn't help results this quarter. Overall sales were up 6% (up 9% at constant exchange rates), with worldwide comps up about 5%. Beneath that, though, you see 12% comps in Japan, 20% in the rest of Asia, 24% in Europe, and negative 1% in the U.S. (because of the 7% decline at the flagship store).

Even though sales didn't offer a lot of juice, the company nevertheless did boost gross margins, and some carry-through at the operating expense level did lead to a 12% rise in operating earnings.

At some level, investing in Tiffany comes down to faith. Are high-end shoppers going to stop spending because of higher interest rates and higher precious metal prices? History would suggest "not really," but the real swing will most likely come from those who are quasi-affluent. In other words, people whose incomes are highly variable (investment bankers, for instance) or who have been freeing up spending money on luxury goods by refinancing mortgages and such.

For the first time in a while, Tiffany shares seem to be trading below their fair value. Not by a lot, mind you (about 10% or so by my math), but still a bit. Of course, with other high-end ideas like Movado (NYSE:MOV), Coach (NYSE:COH), and Nordstrom (NYSE:JWN) selling off lately, Tiffany may not be the only undervalued play on some decidedly not undervalued merchandise.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).