In addition, because Fossil’s wholesale revenues are significantly higher than direct-to-consumer, it’s really more like Ralph Lauren (NYSE:RL) than Coach.
Retail’s tricky right now, making individual stock picks very hazardous. Although I agree with Kyle that you can trust Fossil in the long run, at this point, a consumer discretionary ETF is a safer bet. I’d go with the Select Sector Consumer Discretionary SPDR (NYSE:XLY), a group of 83 stocks that includes Fossil at 0.32%.
Research In Motion
Fellow Canadian Brad Moon was feeling speculative Thursday suggesting Research In Motion (NASDAQ:RIMM) was still worth something. The biggest proof: Prem Watsa, CEO of Fairfax Financial — and often considered the Canadian version of Warren Buffett — now owns close to 10% and is its largest shareholder.
Fairfax has grown its book value 23.5% annually over the past 25 years. If anyone can smell a turnaround, it’s Watsa. Besides, Watsa’s investment is approximately 10% of its $3.8 billion portfolio of common stock holdings and just 1.2% of its total assets. So Watsa’s bet is a diversified gamble.
To make the same play, an ETF is definitely the way to go. The First Trust NASDAQ CEA Smartphone Index Fund (NASDAQ:FONE) is my preferred choice, with Research In Motion weighted at 2.18%. None of the 65 holdings exceeds a weighting of 3.25%, and they are divided 45% among handsets, 45% in software and hardware, and 10% in network providers. Should RIMM bounce back, this fund definitely will benefit.
I’ve liked it ever since CVS acquired Caremark back in 2006, bringing the drug store retailer together with the leading pharmacy benefits manager in America. Since the deal was announced, its stock is up 63% compared to flat for the S&P 500. Recently, CVS has gained market share thanks to Walgreen‘s (NYSE:WAG) spat with Express Scripts (NASDAQ:ESRX). Whether CVS keeps the market share seems to be investors’ biggest concern. Personally, I think both CVS and Walgreen will do just fine no matter what happens in the PBM battlefield.
The ETF pick here is an easy one — the Market Vectors Retail ETF (NYSE:RTH) — with both CVS and Walgreen in the top 10 holdings at 5.03% and 5.02%, respectively. In addition, McKesson (NYSE:MCK), America’s largest pharmaceutical distributor, is a top-10 holding.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.