Ten Diamond and Jewelry Stocks

Here are some facts about diamonds:

1. 130 million carats are mined every year.

2. They are the hardest known natural material.

3. The word diamond comes from the ancient Greek word for "invincible" or "untamed".

4. About half of all diamonds come from central and southern Africa.

5. Other major diamond producing companies include Canada, India, Russia, Brazil, and Australia.

6. A blue diamond sold for about $8 million last year.

The following are some of the major diamond mining companies and jewelry retailers:

Harry Winston Diamond Corporation (HWD) is involved in the mining and marketing of diamonds, and retailing fine jewelry and watches. This Toronto, Canada-based company was founded in 1980. It owns almost half of the Diavik Diamond Mine located in the Northwest Territories, Canada. The stock has a P/E of 17, a PEG of 1.19, and pays a yield of 0.7%.

Mountain Province Diamonds Inc. (MDM) is a Toronto, Canada-based natural resource property exploration and development company which mines for diamonds. The company recently reported negative earnings of -$0.01 per share.

Anglo American PLC (AAUK) which trades on NASDAQ, is a miner of platinum, gold, diamonds, coal, and industrial minerals. The stock has a P/E of 12, a PEG of 0.44, and pays a yield of 2.6%, with a market cap of $88 billion.

Rio Tinto plc (RTP) is a company that mines for everything from iron ore to aluminum to copper to diamonds to coal to talc. Although it is based in London, the company has operations in North America, Europe, Asia, Australia, and New Zealand. This stock has a P/E ratio of 22, a PEG of 0.59, and a yield of 1.3%.

BHP Billiton Ltd. (BHP) and BHP Billiton plc (BBL) is the world's largest mining company, iron ore, diamonds, manganese, coal, copper, nickel, petroleum and bauxite. The Australian BHP Billiton Limited and the British BHP Billiton Plc trade separately with separate shareholders but they operate as one business with the same boards of directors and one management organization. The P/E is 19, the PEG is 2.02, and the yield is 1.3%.

Signet Group plc (SIG), operates H.Samuel The Jeweler, Ernest Jones, The Diamond and Watch Specialist, and Leslie Davis retailers in the United Kingdom, and Kay Jewelers, Jared The Galleria of Jewelry, and other retailers in the United States. The stock has a P/E of 12, a PEG of 0.94 and a yield of 4.8%.

Zale Corporation (ZLC) is a jewelry retailer which has six brands: Zales Jewelers, Zales Outlet, Gordon's Jewelers, Bailey Banks & Biddle, Peoples Jewellers and Mappins Jewellers. The stock has a P/E of 33.

Tiffany & Co. (TIF), founded in 1837, is one of the top jewelry companies in the world, with over 60 U.S. stores and over 100 international locations. The metric carat as a weight standard for gems was developed by a Tiffany gemologist. The New York City flagship store is home to the 128-carat Fancy Yellow Tiffany Diamond. The stock has a P/E of 19, a PEG of 1.2, and a yield of 1.4%.

Blue Nile Inc. (NILE), founded in 1999, is a leading web-based retailer of diamonds and fine jewelry, and the largest online retailer of certified diamonds. The stock has a P/E of 44 and a PEG of 2.02.

Disclosure: The author does not own any of the above.

Comments

[Howard Foster:]

You forgot LKI

2008 May 13 09:17 AM

[amann:]

the real cheap growth stocks are not on this list of beta and gamma companies.

several hong kong jewelry stocks have pe of 5-10 and growth rates of approx. 30% per year in the coming years due to expansion to china and consistently high jewelry market growth rates in hong kong and china, completely uncorrelated with the gold price.

I prefer ming fung (0860.hk) and luk fook (0590.hk).

2008 May 18 07:25 AM

[Glenn Alperin:]

There is another smaller-scale online diamond company out there, Abazias Inc (abza.ob) which I used to own some shares of. However, it's future looks rather clouded as a result of certain (mis)management decisions which I personally wasn't too happy with. The company underwent a reverse split 40:1 and a symbol change, and I got out of it as soon as I was able to make a profit after the split, which took a few months. I had a rather dubious view of the reverse split in the first place as it appeared to be mostly aimed toward rewarding management with the potential for more insider stock option purchases. It is currently trading at more than $3.00 lower per share than when I sold out. I probably would NOT recommend this stock at this time, but it is another player in the specified industry.

2008 Jun 08 04:55 PM

[aryavartjew...:]

It's Very Good Bolg And Fourm

2008 Nov 11 11:36 PM