High-End Jewelry Offers a Gem of a Buy

Despite consumers more frugal shopping strategies, its clear people still are
buying jewelry. Lets face it, there always is going to be a market for silver
and gold and gleaming gemstones. And with the holidays just around the corner,
that market will be expanding. The jewelry business can be a fickle place. So,
if you are interested in investing in a jewelry company, youll want to make sure
its one with the right type of presence and operating strategy. Lets take a look
at two big-name companies now and how they size up to each other. Tiffany & Co.
Tiffany & Co. (NYSE: TIF ) is an iconic staple in the jewelry industry, and for
good reason. For nearly 175 years the jewelry store has designed, manufactured
and sold fine jewelry. The companys products include solitaire jewelry,
engagement and wedding rings, non-gemstone, sterling silver, gold and platinum
jewelry of all sorts. Tiffany also sells watches, sterling silver goods, china,
crystal, fragrances, accessories and leather goods. With 233 Tiffany boutiques
worldwide, the company has established a strong global presence. And in addition
to in-store sales, Tiffanys also distributes products through Internet and
catalog sales, business-to-business sales and wholesale distribution. In the
current quarter, TIF is predicted to achieve 30% growth compared with its
industrys 20% growth. Full-year growth is expected to be over 27%. With gold
prices on the rebound and the cost of diamonds rising, strong jewelry companies
like Tiffanys offer investors an alternative to buying into the mining sector.
Blue Nile Blue Nile (NASDAQ: NILE ) operates as an online retailer of diamonds
and fine jewelry, selling its products worldwide. Blue Niles selection includes
diamonds, gemstones, platinum, gold, pearl and sterling silver jewelry and
accessories, as well as watches and other jewelry settings. Unfortunately, the
company has been in a rut lately. During the past 12 months the stock actually
has dropped 19%. By the end of the year, NILE is only expected to be up 4% from
2010 values. The stock is rated as a D in Portfolio Grader , indicating it is an
immediate sell. So, if you own it, I suggest you get out of the position now.
The only thing NILE has going for it right now is its ROE, and thats certainly
not enough to make it a good buy. If youre looking for a stock with the least
amount of inclusions, TIF shines much brighter than NILE.