Critical Analysis: Fossil Group (NASDAQ:FOSL) versus Puma (OTCMKTS:PMMAF)

Puma (OTCMKTS:PMMAF) and Fossil Group (NASDAQ:FOSL) are both consumer cyclical companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Puma and Fossil Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Puma	N/A	N/A	N/A
Fossil Group	-11.90%	-45.04%	-11.44%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Puma and Fossil Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Puma	0	1	0	0	2.00
Fossil Group	0	0	0	0	N/A

Earnings and Valuation

This table compares Puma and Fossil Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Puma	N/A	N/A	N/A	($3.12)	-12.37
Fossil Group	$1.28 billion	0.05	-$157.09 million	($2.67)	-0.41

Puma has higher earnings, but lower revenue than Fossil Group. Puma is trading at a lower price-to-earnings ratio than Fossil Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

4.7% of Puma shares are held by institutional investors. Comparatively, 61.1% of Fossil Group shares are held by institutional investors. 7.8% of Fossil Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Fossil Group beats Puma on 5 of the 8 factors compared between the two stocks.

About Puma

PUMA SE, together with its subsidiaries, engages in the development and sale of athletic footwear, apparel, and accessories in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company provides sports lifestyle products for football, handball, rugby, cricket, volleyball, track and field, motorsports, golf, and basketball. It issues licenses to independent partners to design, develop, manufacture, and sell watches, glasses, safety shoes, workwear, and gaming accessories. The company sells its products under the PUMA and Cobra Golf brands through retail stores, factory outlets, and online stores. The company was formerly known as PUMA AG and changed its name to PUMA SE in July 2011. PUMA SE was founded in 1919 and is headquartered in Herzogenaurach, Germany.

About Fossil Group

Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. The company’s products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts, and sunglasses. It also manufactures and distributes private label brands, as well as branded products purchased for resell in other branded retail stores. The company offers its products under its proprietary brands, such as FOSSIL, SKAGEN, MICHELE, RELIC, and ZODIAC; and under the licensed brands, including ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, TORY BURCH, and Skechers. The company sells its products through company-owned retail and outlet stores, department and specialty retail stores, mass market stores, e-commerce sites, licensed and franchised FOSSIL retail stores, and retail concessions, as well as sells its products on airlines. The company was formerly known as Fossil, Inc. and changed its name to Fossil Group, Inc. in May 2013. Fossil Group, Inc. was founded in 1984 and is headquartered in Richardson, Texas.