Crazy rich: behind the surge in luxury stocks
By any measure, investors are paying too much for Richemont. But a boom in the luxury goods market is the key
Richemont — one of the most popular rand hedge stocks on the JSE — might, at first glance, appear to be a luxury local investors can no longer afford.
The share is up a glossy 20% over three months, and has registered a more than 30% gain over six months. On a trailing earnings multiple of 35 times and a forward multiple of 31 times, Richemont — which owns brands including Cartier, Van Cleef & Arpels, Baume & Mercier, Panerai, Montblanc and Vacheron Constantin — looks incredibly rich against a JSE where single-digit multiples are now commonplace (especially among SA Inc stocks).