5-Star Stocks Poised to Pop: Harry Winston

By Brian D. Pacampara

Motley Fool

Based on the aggregated intelligence of 130,000-plus investors participating in Motley Fool CAPS, the Fool’s free investing community, Canadian diamond miner and retailer Harry Winston Diamond (NYSE: HWD) has earned a coveted five-star ranking.

With that in mind, let’s take a closer look at Harry Winston’s business, and see what CAPS investors are saying about the stock right now.

Harry Winston facts:

Headquarters (founded)Toronto, Canada (1980)Market Cap$322.1 millionIndustryPrecious Metals and MineralsTTM Revenue$609.22 millionManagementCEO Robert Gannicott (since 1999)CFO Alan Mayne (since 2008)Return on Equity (average, last three years)17.6%Dividend Yield4.8%CompetitorsBHP Billiton (NYSE: BHP)De Beers Consolidated MinesCAPS members bullish on HWD also bullish on:General Electric (NYSE: GE)Vale (NYSE: RIO)Freeport-McMoRan (NYSE: FCX)CAPS members bearish on HWD also bearish on:US Airways (NYSE: LCC)General Motors (NYSE: GM)
Sources: Capital IQ (a division of Standard & Poor’s), and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, 117 of the 118 All-Stars members who have rated Harry Winston — or 99% — believe the stock will outperform the S&P 500 going forward. These bulls include starrider78 and Pumpstick.

Last week, starrider78 noted that Harry Winston “owns 40% of the Diavik mine, with right of first refusal on the rest of the mine.” Our CAPS member concludes: “When the economy picks back up, this stock will rocket. They are heavily dependent on Forex at the moment, but that will change as the economy improves.”

In a pitch from January, Pumpstick tapped the valuation (which is even cheaper today) as a bargain hunter’s best friend:

Diamonds are forever (TM) but not at this price!Some luxury goods will not suffer as much as others during a recession. Harry Winston is a brand with a long history. Harry Winston has a great reputation known for quality and exclusivity and is the ultimate of diamond design.

There will always be costumers for their jewelry, and there will be a growing demand in China, Russia and the Middle East….

This stock has been beaten down way too much. Their earnings are exceeding expectations. They have a relative low amount of debt, and are trading way below intrinsic value.
What do you think about Harry Winston Diamond, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 130,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

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The founder and president of Diamond Cutters International, is one of the world’s top diamond experts, as well as a three-time Guinness Book record holder in jewelry design.
Fred The Diamond Guy
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