#7 - Signet Jewelers (NYSE:SIG)
The last stock we’re putting on this list is Signet Jewelers (NYSE:SIG). The world’s largest retailer of diamond jewelry has been a surprisingly strong performer. It’s up 25% for the year and over 300% since the onset of the Covid-19 pandemic.
The big problem for Signet is that it relies heavily on its brick-and-mortar presence in malls. And we don’t have to emphasize what a troublesome area that is. Of the five analysts that cover the stock, four give it a sell rating. And the consensus price target of $13.75 means the stock could drop over 40% from its current level.
Beyond its brick-and-mortar presence, Signet faces a problem as many couples delay marriages due to Covid-19 restrictions. The company is pushing a “Path to Brilliance” initiative that will assuredly address the company’s weak omnichannel capabilities. But with such a personal purchase, it’s hard to see many people completely going to an e-commerce model.
About Signet Jewelers
Signet Jewelers Limited operates as a diamond jewelry retailer. It operates through three segments: North America, International, and Other. The North America segment operates jewelry stores in jewelry stores in malls, mall-based kiosks, and off-mall locations in the United States and Canada primarily under the Kay Jewelers, Kay Jewelers Outlet, Jared The Galleria Of Jewelry, Jared Vault, Zales Outlet, Zales Jewelers, Diamonds Direct, James Allen, Banter by Piercing Pagoda, and Peoples Jewellers names, as well as operates online through its digital banners, James Allen and Blue Nile.
Read More - Current Price
- $81.14
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 3 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $109.60 (35.1% Upside)
I don’t want to leave you thinking that taking profits is a market timing strategy. That typically doesn’t work well, even for experienced investors. It’s important to understand that most publicly traded companies aren’t really sweating the presidential election outcome. In fact, in most cases, they feel like you do. That is, they’ll be glad when it’s all over.
The key to making a profit at this time is looking at the bigger picture and seeing if this is a stock that you’ll regret not having sold in six months. I use that timeframe because the election may cause a significant change to our tax policy. Specifically, capital gains rates could be going up. And that makes a decent argument for locking in some of those gains at a lower tax rate before the end of the year.
Warren Buffett is one of the most unapologetic buy-and-hold investors. But even the Oracle of Omaha has engaged in some high profile selling. And if you own one of the stocks in this presentation, it may be time for you to do some selling.
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