November 11, 2003 Fossil, Inc. (FOSL)
Hello Friends. Market is getting ready to close and I have one more stock to share with you! As always, PLEASE discuss all of these ideas with your certified financial advisor as I am not one of those, I am an AMATEUR who loves the market...ok that's enough said. Came across Fossil, Inc. (FOSL) this afternoon. I do not own any shares not do any of my family although my kids have a couple of their watches!

According to money.cnn.com, FOSL "...designs, markets and distributes fashion watches and accessories, including sunglasses, small leather goods, belts and handbags." Currently as I write FOSL is trading at $28.42 up $1.79 or 6.72% on the day.

What drove the stock up today was an announcement of their third quarter sales and earnings today (11/11/03). As reported by NYTimes on the Web, from PRNewswire-FirstCall, FOSL reported for the thirteen week period ended October 4, 2003. Net sales increased 16.9% to $192.6 million compared to $164.8 million in 2002. Net income increased 19.2% to $16.8 million or $.34/diluted share vs $14.1 million or $.29/diluted share last year. These were great results and in fact, a record for the company.

Morningstar.com shows a steady record of revenue growth from $304.7 million in 1998, $418.8 million in 1999, $504.3 million in 2000, $545.5 million in 2001, $663.3 million in 2002 and $706.6 million in the trailing twelve months.

Earnings per share have improved from $.66/share in 1998 to $1.23 in the trailing twelve months. Free cash flow while taking a dip in 2001 to ($7) million has improved from $20 million in 2000, to $51 million in the trailing twelve months.

The balance sheet, as reported on Morningstar.com, shows $132.5 million in cash, more than enough to cover BOTH the current liabilities of $84.7 million AND the long-term liabilities of $41.7 million. In addition, Morningstar reports that FOSL has an additional $220.6 million in OTHER current assets.

Looking at "key statistics" on Yahoo.com, we find that FOSL has a Market Cap of $1.33 Billion, the trailing p/e isn't too high at 23.00, and the forward p/e (up to fye January, 2005), is at 16.34. The PEG ratio isn't bad at 1.19, and the price/sales also isn't too pricey at 1.76. All-in-all not too bad a value for a growth stock.

Yahoo reports that there are 46.60 million shares outstanding with 716,000 shares out short representing 2.819 trading days as of 10/8/03. The float is only 24.7 million shares. No cash dividend is paid. The last stock dividend was a 3:2 split last year in June, 2002.

If you can't tell from this write-up, I actually LIKE FOSL. I am not THAT excited about their watches personally but my kids think they are 'hot'. Generation thing I guess. What attracts me is the reasonable valuation on a very consistent growth company. PEG ratio near one, Price/sales near 1.75, P/E itself just over 20, and a superb balance sheet. Now if I ONLY had some CASH instead of a LOAD of Margin! Oh well. Thanks again for stopping by! If you have any questions, comments, or words of encouragement, please feel free to email me at bobsadviceforstocks@lycos.com!

Bob