Investment Analysis
Luxury Goods
Harley
Marine
Max
First Flight
Tiffany’s
Toyota
Why this Industry?
In this troubling economy, this industry will flourish.
The upper class will always have money to spend.
Let’s analyze leading luxury firms so we can invest smart
and join them.
Volume: measured by sales revenue
• Toyota is biggest by far.
• They also have the highest
Net Income at $17 billion.
25
20
15
10
$262 billion
30
• This volume gives Toyota
several strengths:
5
0
Toyota
Harley
Tiffany's
First Flight
Marine
Max
–
–
–
–
–
Money to buy competitors
Develop new technology
Economies of scale
Promote
Success makes borrowing
easy
Growth: Measured By Sales Increase
Growth From 05-07
40
Toyota
25
20
15
200%
30
47%
Percent Growth
35
•
10
5
0
Toyota
Harley
Tiffany's
First Flight
Marine Max
•
Growth From 05-07
Billions
25
20
15
10
83Billion
30
•
5
0
Toyota
Harley
Tiffany's
First Flight Marine Max
•
Even though Toyota grew only 47%
compared to First Flight Inc.’s 200%,
Toyota’s dollar amount growth from
05 to 07 was close to 85 Billion
dollars.
We think that the last three years for
Toyota reflect it’s future success
because of the niche product they
provide in Hybrid Technology.
This growth and continued success is
an indication of Toyota’s superior
management prowess.
This growth means they will continue
to enjoy the benefits of their volume
long into the future.
Value: Measured By P/E Ratio
• P/E ratio is the price of the stock to the earnings per share
ratio – the price to buy one Dollar of the company’s earnings
30
Value
A bit scary
Overpriced
25
20
15
10
5
0
Toyota
Harley
If other investors are right.
High P/E ratio:
The company is
expected to make strong profits in
the future so the high price is
justified.
Low P/E ratio:
The company is expected to not
prosper and so it is cheap to
own but still probably not a good buy.
Tiffany's
First Flight Marine Max
If other investors are wrong
• High P/E ratio
The price is higher than justified by
the company’s earnings potential.
The stock is not worth the price.
• Low P/E ratio:
Other investors are not acting on
rational investment analysis. A
Strong company is cheap and
represents a buying opportunity.
Toyota is The Best!
Size!
Growth!
Value!