Top Pick Tuesdays – LVMH Moët Hennessy Louis Vuitton

LVMH Moët Hennessy Louis Vuitton SE (LVMUY: OTC)
Price at Preparation: $155.00 (EOD Friday Nov 17, 2023)

What they do

LVMH Moët Hennessy Louis Vuitton SE (LVMUY:OTC) engages in the manufacture of luxury goods. It operates through the following business segments: Wines & Spirits, Fashion & Leather Goods, Perfumes & Cosmetics, Watches & Jewelry, Selective Retailing, and Other Activities. The Wines & Spirits segment produces and sells high quality champagne wines and sparkling wines. It also distributes vodka and white liquor. The Fashion & Leather Goods segment engages in the manufacture of luggage items, bags, accessories, shoes and clothes. The Perfumes & Cosmetics segment engages in the production and distribution of make-up, perfume and skin care products. The Watches & Jewelry segment manufactures luxury watches and accessories for men and women. It specializes in the field of chronographs and ultimate precision. The Selective Retailing segment is organized to promote an environment that is appropriate to the image and status of the luxury brands. It engages in the sale of luxury products to international travelers and on-board cruise ships. This segment also manages beauty stores that combine direct access and customer assistance to customers. The Other Activities segment includes media division where it publishes newspapers and magazines, manages business and financial websites and holds radio stations. This segment also engages in the real estate industry and builds luxury yachts. The company is headquartered in Paris, France.

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Opinion

This pick has one primary purpose – we are betting on the market run-up for both Black Friday and into Christmas for results in earnings report on January 25th, 2024.  The stock has a 1-year price target of $183.82 (+17.95%).  For a brief technical analysis, the stock recently came down to a support/resistance line just below $144. The trade was entered due to price action bouncing off this support line shown in the diagram below and starting a move up.  We see resistance points at $159.35 (well on the way there), $175.59 and finally a previous high around $200. Using the indicators shown there is good probability of the stock moving up based on where the stock is now vs where it was during its high periods.

With the economic struggles and still the world opening back up from the pandemic, luxury goods have been weaker, which presents an opportunity for this trade. That potential opportunity being such that we see using Christmas as the catalyst for potential sales and a stock price increase.  A secondary catalyst for Chinese New Year could be a potential bonus to extend the trade.  Please manage your position accordingly and take profit at the resistance lines as there may be volatility in those zones.

Plan

This stock is based in Europe, so for North America we have access to this via an ADR (American Depository Receipt) on the OTC (Over The Counter) markets. Unfortunately, there are no options available with this stock and therefore limits our toolset available. This is a pure stock play, as such please refer to the opinion section above for the technical analysis plan. This is an expensive stock, just like all their products so size in shares accordingly and scale out at resistance points to secure profit, with stops set at the previous support to protect a downside move. We would aim to be out of this trade or on the last leg of the trade by next earnings report of January 25th, 2024 to leave profit to run for the secondary catalyst as mentioned. For full disclosure, as of the writing of this article, the author has taken a position and executing this plan.

RISKS

All trading involves risk, hence there have been call outs in previous sections for both securing profit on the way up and using stops to manage the downside. There are lines marked out with potential levels where volatility may exist and next levels where the stock price may move to if it breaks support/resistance lines.

Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.

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