Harry Winston Diamond (TSE:HW)

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I initiated a small position in Harry Winston Diamond today at 5.10 for two main reasons low P/E and low P/B. HW has no long term debt and they own plenty of high quality mines in Canada.

With a recession, people will still be getting married and people will still be purchasing diamond engagement rings. Also, price of diamonds is currently undervalued compared with gold. I expect that diamond prices will be priced more accurately relative to gold in the future.

I am buying this stock for a long term hold. Once we get out of this recession, and people start spending more, this stock should be ready for a good rebound.

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