All that glitters may not necessarily be gold, but in the case of Signet Jewelers Ltd. (NYSE: SIG) the old adage appears to be untrue. Signet retails jewelry, watches, and myriad gifts in the United States and the United Kingdom. It is the leading specialty jeweler globally. Since 2008, the company has been quartered in Bermuda and its shares traded publically on the New York Stock Exchange. Signet is the undisputed king among specialty jewelry markets in both the United States and the United Kingdom. Most of this success can be attributed to their successful marketing and branding. Ever see the commercial declaring “Every kiss begins with Kay”? Or how about “He went to Jared”? Both are the result of the marketing genius of Signet.
Signet does a pretty good job of creating appealing product to distinguish their retail outlets from their competition. Offerings such as the Leo Diamond, touted as the only certified diamond to be more brilliant than all the rest, the Open Hearts Collection by Jane Seymour and the Le Vian Chocolate Diamond Collection are just three of the winning brand name ideas that set apart the Signet jewelry franchises from all the rest.
Signet’s performance has been extraordinary since 2008. Operating earnings growth has seen a healthy 22.9%, and the company shows no debt on its balance sheet. Their financial third quarter results, reported on November 20, 2012, show the company is continuing its robust performance. Signet hit a new 52-week high before Christmas trading at $56.56, above its previous 52-week high of $56.15. It is currently trading at $53.70. Average volume has been 668,456 shares over the past 90 days. The company has a market cap of $4.3 billion and is part of the services segment and specialty retail industry. Shares are up over 21% this year.
Kay was responsible for 48% of company sales in Fiscal 2012. The subsidiary operates 920 stores in all 50 states. Based on sales, Kay is the largest specialty retail jewelry store brand in the United States. The jewelry store targets families with an income of between $35,000 and $100,000. Another subsidiary, Jared, is the leading off-mall specialty retail jewelry store chain in its part of the market. Jared accounted for 25% of Signet’s sales in 2012.
Community sentiment is bullish on Signet at this time. The company has more strengths than weaknesses and there appears to be nothing to upset its strong performance in the near-term. No company is perfect and as with all perspective investments, we recommend research as the best route to adding any play to your portfolio.