Goldman Sachs Suggests Buying Straddles on Tiffany & Co.
December 21, 2011 4:30 PM
Goldman Sachs is out with a research note this afternoon, where it suggests that traders buy straddles on Tiffany & Co. (NYSE: TIF) ahead of its Jan 10th sales release.
Goldman's analysts believe that TIF's upcoming holiday sales release on January 10 is likely to be a more significant catalyst than it has been in the past.
The analysts noted that TIF shares are down 18% since the beginning of November as uncertainty is high. Given November/December typically account for about 30% of annual sales, the holiday sales announcement will be a critical signpost as TIF goes through a transition to slower sales growth, contracting margins and tough compares.
The analysts suggest buying the January 2012 $65 straddle for $5.23
Tiffany & Co. is a holding company and conducts all business through its subsidiary companies. The company, through its subsidiaries, including Tiffany and Company, sells fine jewelry and other items that it manufactures or has been made by others.
