Loving Ourselves and Our Luggage: the Psychology Behind the Spike in Tumi Shares?


This week, investors piled into Tumi ( TUMI ), a luggage maker, whose stock soared 23% in a day. Some saw a growth story. Tumi earned $6.5 million in the second quarter, which seems like a decent amount of money for a company founded by a Peace Corps volunteer and named after a Peruvian ceremonial knife. Some saw a Credit Suisse analyst come out bullish about Tumi's global brand.

TUMI data by YCharts

Another possibility for the stock surge: a bunch of hipster investors looked in the mirror and saw themselves with one of the company's fancy black satchels. Compare the performance of Tumi to another company in the luxury luggage space, Coach ( COH ). If hipsters shop at Tumi, their mothers get their leather purses and wallets at Coach - and their nieces buy the knock-offs plastered with big 'C's. Both stocks are down since Tumi's debut this spring, but Tumi's down a bit less:

TUMI data by YCharts

This could work out well for all involved. Maybe these times call for expensive but understated luggage that you know is luxurious but won't be perceived as ostentatious, consumerist bling. You can take it on your upcoming African safari and not feel like an ugly American. Also, investors seem to like buying stocks in companies that make the toys they use, like Apple ( AAPL ), or the sell the wares they like, like Amazon ( AMZN ). Hipsters are trendsetters, and people who were early adopters of tech and those stocks have done just fine.

AAPL data by YCharts

But one word of caution to Tumi stock fanboys: not everyone's going to run for a $1,400 Tumi suitcase, or even a $400 duffel bag. And no matter how nice it is, it will still get destroyed - or lost -- by the airlines.

From the editors of YCharts. YCharts Pro Investor Service includes professional stock charts , stock ratings and portfolio strategies .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: investing , Stocks

Referenced Stocks: AAPL , AMZN , COH , TUMI



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