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No. of Recommendations: 7
and c'mon guys, I know more of you than Martian/NMS have ideas for buys & adds in this market.

Initiated position in Pandora A/S - should get Martian excited! :)

This is the jewelry/bauble firm, not the streaming audio company.

Pandora is global brand trading at ~16x 2016 EPS.

It has double-digit sales growth, 22.4% in Q1 FXN [37% gross] and an asset-light model. Volume up 5.6%, ASP up 30% YoY [!] while prices per product were unchanged [i.e. new prods like Disney, also FX benefit]

EPS and Sales estimated up 27-33% this year. GAAP. Gross margin rose 2 pts to 71.1%. Excl hedging would have been 73%.

Pays a decent dividend. Buying back stock -- total return of capital has been 8.5-10%+ each of the past 3 years.

'Branded' jewelry has less than 20% of the market compared to leather goods at 50% and watches at 60%.

'Cheap luxury' category - ASP is ~$25

Ebitda margin ~37% at current FX rates. SSS was 8.9%.
67% of biz is charms, the rest evenly split among silver/gold bracelets, rings, and other. Charms/bracelets grew over 34%, rings up 84%.

Opening 325 new concept stores this year vs 300 estimated. Closed 944 underperforming unbranded PoS so not growth for growth's sake.

Converting franchises to owned/operated where possible, such revenue increased 115% YoY as % rose to 20% from 13% in Q1 2014. Net effect of converting wholesale to retail revenue was ~$10m.

Total share obligation to employees is 840k shares [of 121m]. Treasury holds 7.5m shares. Net cash on B/S, almost no debt.

All geographic regions and all product lines growing double-digits.
Last Year's revenue was ~1.6Bn EUR.
45% Americas, 40% Europe, 15% Asia Pacific. HK grew 100%+.


Pandora opened their e-tailer in US in April of this year. This is their 8th country with an e-store.

Pandora has 9600 PoS and 1400 concept sotres in 90 countries. Company founded in 1982 in Copenhagen, makes most jewelry in Thailand.
Pandora does hedge gold and silver pricing but delayed impact due to inventory. 10% move in underlying is +/- 1% GM.
Inventory is around 15% of annual revenue, so 2 months worth.

EPS comes out on Tuesday. All predictions guaranteed wrong or your money back.
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