The Movado Group's Business Model Generates Impressive Results

| About: Movado Group, (MOV)

New Jersey based Movado Group Inc. (NYSE:MOV) engages in the manufacture, distribution and retail sales of watches and jewelry. MOV was listed as part of the: Top Small Cap Dividend Payers in the March 19 issue of Barrons. It also has the distinction to be ranked highly enough to be included in the Clear Small Cap Growth portfolio.

It was founded in 1961, and is based in Paramus, New Jersey. It offers its watches under the brands, including Movado, Ebel, Concord, ESQ, Coach Watches, Hugo Boss Watches, Juicy Couture Watches, Tommy Hilfiger Watches and Lacoste Watches. The company also designs, develops, and markets proprietary Movado-branded jewelry, and accessory products. The Movado Group sells its products directly, as well as through jewelry store chains, department stores, and a network of independent distributors in North America, Europe, Asia, the Middle East, South America and the Caribbean.

MOV operates 31 Movado Boutiques, and 30 outlet stores. Between its manufacturing facilities in Switzerland, corporate headquarters in Paramus, New Jersey, USA, and Bienne, Switzerland, and its sales, and distribution offices that are located around the world, the Movado Group employs more than 1,700 people.

Its business model has proven successful in generating impressive financial results, and company growth. Its current market capitalization is approaching $900 million, and its annual revenue is at $536.48 million. The growth data includes a year over year quarterly revenue rise of 3.70% during the most recent quarter, and an 11.55% revenue increase over the past year. Net income grew 70.64% over the last year, and has risen 23.09% annually over the course of the past five years.

Despite the high growth rate, MOV has maintained a 5.81% return on assets (ROA) and a robust return on equity (ROE) of 13.99% over the past twelve months. It also holds a strong operating margin of 9.63% in comparison to its peer group average of 2.74%.

Our multi-factor model maintains the calculation that the valuation of the stock remains at a reasonable level when compared to other small growth opportunities. An indicator of this is found in a relatively modest price to earnings to growth [PEG] ratio of 0.255 over the past year. Based on a balance of current valuation, and fundamentals, we calculate benchmark beating returns for our investors.

Disclosure: Mr. Corn is CEO of Clear Asset Management Inc. Movado Group Inc. (MOV) is a holding in the Clear Small Cap Growth portfolio. Mr. Corn owns shares of (MOV) directly through his participation in the portfolio.

MOV 1-yr chart:
MOV 1-yr chart