Watches of Switzerland Group PLC
Thesis
Watches of Switzerland is a leading retailer in the luxury watch market, particularly with Rolex, and has shown significant growth potential, especially in the US market where it has grown 30% annually over the last five years. The company trades at 12 times free cash flow, which is considered undervalued given its strong market position and expected double-digit earnings growth. The primary concern for investors is the recent acquisition by Rolex of another retailer, which may impact their relationship, but the long-term growth potential remains strong.
Did it work?
The pitch is a long thesis on Watches of Switzerland predicated on undervaluation (12x FCF) and sustained double-digit growth, but no price performance or time elapsed is provided, so the return component of the thesis cannot be evaluated. The one verifiable event referenced — Rolex's acquisition of another retailer (Bucherer) — did occur, confirming the stated risk, but the core growth and valuation thesis remains untested. Without price data or a confirmed outcome on the growth trajectory, no verdict on success or failure is possible.