Singular Diligence On Movado Group, Inc (MOV)

Singular Diligence On Movado Group, Inc (MOV)

Singular Diligence On Movado Group, Inc (MOV) by Tobias Carlisle, Greenbackd

This month’s issue of Singular Diligence cover Movado Group, the designer and marketer of luxury watches.

Movado the company is more than just the Movado brand. The company owns two other brands in addition to the namesake Movado brand: Concord, and Ebel. The Movado brand is considered an “accessible luxury” brand, but Concord, and Ebel are genuine luxury watches. Concord watches usually sell for over $10,000 a piece. Ebel sells for mostl $1,500 to $5,000. About 80% of Ebel sales are to women.

Additionally, Movado has been making licensed watches for about 15 years. In 1999, it introduced Coach-branded watches, which generated $16 million in sales that first year. MOV has since obtained the license for Tommy Hilfiger (2001), Hugo Boss (2005), Lacoste (2006), Juicy Couture (2006), and Ferrari (2012).

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MOV went public in 1993 (as the North American Watch Company). It remains under the control of the founding Grinberg family through a Class A stock that delivers 67% voting control.

Movado is an unusually cheap stock, not just in comparison to other stocks today, and not just in comparison to its peers. It’s cheap relative to the price the average stock has traded for in the past. MOV is not a growth stock, but it is undervalued.

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My name is Tobias Carlisle. I am the founder and managing member of Eyquem Investment Management LLC, and portfolio manager of Eyquem Fund LP. Eyquem Fund LP pursues a deep value, contrarian, Grahamite investment strategy based on the research featured in Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors (hardcover, 288 pages, Wiley Finance, December 26, 2012), and discussed on Greenbackd. I have extensive experience in activist investment, company valuation, public company corporate governance, and mergers and acquisitions law. Prior to founding Eyquem, I was an analyst at an activist hedge fund, general counsel of a company listed on the Australian Stock Exchange, and a corporate advisory lawyer. As a lawyer specializing in mergers and acquisitions I have advised on transactions across a variety of industries in the United States, the United Kingdom, China, Australia, Singapore, Bermuda, Papua New Guinea, New Zealand, and Guam, ranging in value from $50 million to $2.5 billion. I am a graduate of the University of Queensland in Australia with degrees in law and business (management). Contact me I can be contacted at greenbackd [at] gmail [dot] com. I welcome all feedback. Connect on LinkedIn, where we’re Friends.

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