Compagnie Financiere Richemont SA

“Richemont owns two of the most durable consumer franchises on earth in Cartier and Van Cleef & Arpels — genuine multigenerational moats, 30%+ operating margins, a fortress balance sheet, and a structurally growing ultra-wealthy customer base. However, at ~25x forward earnings the valuation offers no margin of safety for a mid-single-digit organic grower with concentrated China exposure, a dual-class governance structure that has already destroyed €2-3B of minority capital, and a 10-year expected return of roughly 2-2.5x. The business deserves to be owned; the entry point does not yet warrant conviction. A 15-20% pullback to CHF 125-135 would provide an adequate margin of safety and push the 10-year IRR into genuinely compelling territory.”