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4-Star Stocks Poised to Pop: Fossil

By Brian D. Pacampara, CFA - Updated Apr 5, 2017 at 7:04PM

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Market-trouncing returns could be written in this 4-star.

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, fashion accessories maker Fossil (NASDAQ:FOSL) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

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

Fossil facts

Headquarters (Founded)

Richardson, Texas (1984)

Market Cap

$947.3 million

Industry

Apparel, Accessories, and Luxury Goods

Trailing-12-Month Revenue

$1.58 Billion

Management

CEO Kosta Kartsotis (Since 2000)

CFO Mike Kovar (Since 2000)

Brands

Proprietary: Fossil, Michele, Relic

Licensed: Burberry, Diesel, Adidas

Return on Equity (Average, Past Three Years)

15.8%

Competitors

Guess? (NYSE:GES)

Coach (NYSE:COH)

CAPS Members Bullish on FOSL Also Bullish on:

Apple (NASDAQ:AAPL)

Dynamic Materials (NASDAQ:BOOM)

CAPS Members Bearish on FOSL Also Bearish on:

Crocs (NASDAQ:CROX)

Google (NASDAQ:GOOG)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 269 of the 301 members who have rated Fossil -- some 89% -- believe the stock will outperform the S&P 500 going forward. These bulls include Hozer02 and jst1958.

Last month, Hozer02 focused on Fossil's well-preserved fundamentals: "Positive cash flow year in and year out ... the more I look at this company, the more I realize they are much more than just watches."

In a pitch from a week later, jst1958 shared that bullishness and said the stock was a "timely" opportunity. Here's an excerpt:

Even a more dramatic downturn in forward business does not endanger the company given their strong balance sheet and cash flow. ... Moderate priced attractive time keeping "jewelry" should be a nice gift this Christmas and will be a viable product as long as humans walk the earth. …

Their management and their products have been deployed in the international arena for years and they have long term growth opportunities in Europe and Asia through direct to consumer channels. This is a $3.0 billion company in 3 years with leveraged infrastructure and improved product margins.

What do you think about Fossil, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Fossil and Dynamic Materials are Motley Fool Hidden Gems picks. Coach and Apple are choices of Stock Advisor. Google is a Rule Breakers recommendation. The Fool's disclosure policy always gets a perfect score.

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Stocks Mentioned

Fossil Group, Inc. Stock Quote
Fossil Group, Inc.
FOSL
$6.04 (-2.11%) $0.13
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$121.68 (2.39%) $2.84
Apple Inc. Stock Quote
Apple Inc.
AAPL
$172.10 (2.14%) $3.61
Tapestry, Inc. Stock Quote
Tapestry, Inc.
TPR
$35.69 (0.54%) $0.19
Crocs, Inc. Stock Quote
Crocs, Inc.
CROX
$77.94 (1.48%) $1.14
Guess?, Inc. Stock Quote
Guess?, Inc.
GES
$20.55 (1.03%) $0.21
DMC Global Inc. Stock Quote
DMC Global Inc.
BOOM
$23.40 (2.27%) $0.52

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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