We just completed our pre-IPO note for Tumi (TUMI $15 to 17). It’s a high quality company that should attract quite a bit of demand from investors. Especially after the sizzling success of both Vera Bradly ($VRA – $27) which peaked at $50 and did a secondary offering and Michael Kors ($KORS – $43) which has been a stellar performer in the aftermarket.

Tumi is also benefiting from a dearth of new US listings in the category. Other than the two above there have not been many to chose from. Looking down the current IPO pipeline isn’t very encouraging either. Most of the growth deals are in technology, healthcare, energy and industrials.

This relative supply/demand imbalance has pushed valuations high. KORS and Coach (COH – $75) are trading at 7x and 4.5x sales respectively. Hermes (Paris: RMA $330) is at almost 10x sales.

If the price is at or just above the current range TUMI looks like a great core holding in the space. Our note is available at the link above, in the sidebar or on the Research Reports page.

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