Watches of Switzerland Group PLC
Thesis
Watches of Switzerland is trading at a very low valuation despite its strong partnership with Rolex and a well-incentivized management team. The recent Swiss tariffs were incorporated into the valuation, and there are indications that these tariffs may be reduced, which could further enhance the company's prospects. The stock was purchased in August after a significant price drop, reflecting confidence in its medium-term distribution relationship with Rolex.
Did it work?
The stock has only appreciated by 0.7% over 36 months, which is significantly below expectations for a long position, especially given the thesis's emphasis on strong partnerships and potential tariff reductions. The lack of meaningful price movement indicates that the anticipated catalysts did not materialize as expected, leading to a failure of the investment thesis.
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