Glenview's Larry Robbins Adds to Stake in Watchmaker Fossil

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Sep 15, 2014
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Glenview Capital Management’s Larry Robbins (Trades, Portfolio), the top-performing hedge fund manager last year, reported on Monday adding shares to his stake in Fossil Group Inc. (FOSL, Financial), according to GuruFocus Real Time Picks.

Robbins purchased 582,100 shares of the company, increasing his total holding to 3,255,738 shares. The stake gives him 6.15% ownership of the company as of Sept. 12. Robbins has held the stock since second quarter 2013.

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Fossil Group’s shares have dropped by more than 16% this year to close at $100.32 per share on Monday. The company is primarily a maker of watches with lines of handbags, jewelry and other fashion accessories.

In the second quarter, Fossil reported net sales of watches increased year over year by 12% and net sales of jewelry increased by 19%. Net income was $52.5 million, or $0.98 per diluted share, compared to year-prior results of $67.7 million, or $1.15 per diluted share.

Fossil also repurchased 600,000 shares at a cost of $67.3 million, for an average purchase price of $107 per share. The company at July 5, 2014, had $309 million remaining of its share purchase authorization.

For the full year, the company expects a net sales increase in the range of 8.75% to 10.0% and diluted earnings per share in the range of $6.95 to $7.35. The 2014 guidance includes an estimated $0.10 per diluted share charge due to plans to improve profitability in the company’s North American retail stores that resulted from a strategic review of the stores in the second quarter. The company expects to record the charge in the latter quarter of fiscal 2014 or first half of fiscal 2015.

Over the past five years, Fossil has achieved annual growth rates of 25% for revenue, 28.6% for EBITDA, 18.2% for free cash flow and 8.8% for book value.

Fossil’s long-term revenue and growth history:

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Robbins’ Glenview Institutional Partners fund has gained 15.4% this year through August, Bloomberg reported. The manager’s top holdings are Thermo Fisher Scientific Inc. (TMO, Financial), Monsanto Co. (MON, Financial) and Flextronics International Ltd. (FLEX, Financial).

See more of his investment activity at his portfolio here. For more stock trades of Gurus in real time, visit GuruFocus’ Real Time Picks, a Premium Feature. Not a Premium Member of GuruFocus? Try it free for 7 days here.