Aside from the luxury jewelry line, it owns 40% of the huge Diavik Pandora Chains, in Canada's Northwest Territories. The company estimates its stake in the mine to be worth around $4 billion in future revenue. Set to be harvested over the next 12 years, the mine is tightly leveraged to world diamond prices- that is, it registers disproportionately large gains as demand rises. The market may be overlooking the full value of the Diavik mine. Although Harry Winston shares Gold Beads (Charms) look cheap compared with earnings- they trade at 30 times estimated profit for the current fiscal year -they're strikingly attractive when compared with the value of the mine. The company's total market capitalization is just $1 billion. And, being one of the rare publicly traded diamond miners located in a politically stable country and free of the controversial labor practices Pandora Necklaces African miners, Harry Winston shares enjoy the kind of scarcity value that's cherished by big investors. Interestingly, Hairy Winston's operations at both ends of the diamond industry have nothing to do with true vertical integration. The company sells the rough diamonds from its mines to refiners in the global wholesale market, and then buys the very best of the global gem output Silver Beads (Charms) its jewelry designs. Yet Gannicott says the company gleans important market intelligence about pricing trends from both market segments. Its jewelry business picks up supply-and-demand information that helps its wholesale business capture pricing changes, and vice versa.
Commentaires