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Four Reasons Tiffany Is Dazzling Investors


The dividend is sparkling, and shares could move higher from here.

I shoveled snow for a half an hour last night before going to bed hoping that maybe it would make a difference when I woke up this morning. No such luck: There's another six to eight inches out there and it's still coming down.

Asian stocks rose overnight. The Hang Seng and the Nikkei were up 0.67% and 0.31%, respectively. European stocks were in positive territory early this morning, too. And here in the US, we're currently trading lower.

Here's what I'm seeing this bitter cold Wednesday morning:

Tiffany (TIF):
Bank of America-Merrill upped its rating on the jewelry giant.

My take:

1. I'm not jumping up and down about the shares or the upgrade. However, the company has been performing as of late, slicing through estimates like a diamond cutter.

2. I'm feeling pretty good about its potential to come in ahead of the $1.13-a-share estimate for the fourth quarter, too.

3. Let's not forget about that sparkling dividend.

4. I think the shares move higher from here.

Disney (DIS):
The company was out with its first-quarter numbers. It put up $0.47 a share, excluding items, which was dandy because the Street was at $0.38. A healthy bump-up in operating income in its studio business helped gas results.

Some thoughts:

1. I've been a big fan of Disney for a while now and nothing's changed (see Why Now Is a Good Time to Play Disney). If it can put up a good number like this in what's still a lousy environment, I can only fathom what it might kick out when the economy really starts humming.

2. Over the next few quarters I'm thinking that its consumer products and parks & resorts segments will start to contribute in a much more meaningful way, and that the earnings outlook could improve from here. Not to mention that the ad environment should show us a pulse, too.

3. Note that the company has now thumped estimates four quarters in a row. I think that will put it squarely on a few radar screens in today's session. My hunch is that we break and close north of the $30 level.

Baidu (BIDU):
The search engine company was out with its fourth-quarter numbers after the bell last night. It put up $1.80 a share, which was way better than the $1.68 analysts were expecting. It beat on the top line too, and it offered up a pretty rosy outlook for the first quarter.

Things have been going good for Baidu. It's whipped estimates the past few quarters, its stock has been on a nice roll, and people seem to be all jazz hands about the future.

However, the shares have come an awful long way in a seriously short period of time. And my biggest worry is what could happen if the company misses expectations or goofs up. I think the stock would get creamed. Don't get me wrong -- I'm impressed with the earnings growth potential this company has. But with an estimate of just $8.92 a share for this year, I'm not ready to belly up -- regardless of whether the shares get a nice goose in early trading.

Justin Sharon points out this morning in his article that Goldman slapped a Neutral rating on the bank.

I wasn't excited about the company or stock when it was trading in the low single-digits (around the $5 level) and I'm not now. Why should I belly up? The markets and the economy are still iffy and the near-term earnings outlook isn't all that impressive. If I were going to snuggle up to a big name in this space, I'd rather go with JPMorgan Chase (JPM).

For my last take on Citi, click here.

Have a great day!
No positions in stocks mentioned.

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