2 Reasons Tiffany & Co. Will Shine in 2014

Tiffany proved it was a diamond in the rough this earnings season, after delivering third-quarter results that trounced analyst expectations and left rivals in the dust. As a result, investors pushed the stock higher by more than 8% on Tuesday. For the quarter ended October 31, Tiffany delivered earnings per share of $0.73 or a profit of roughly $95 million. That represents a 50% spike in quarterly profit from the same period a year ago. Third-quarter revenue clocked in at $911.5 million. For comparison, Wall Street was looking for earnings of $0.58 on revenue of $888.4 million, according to FactSet.

Not only did Tiffany post strong earnings growth, but the jeweler also raised its full-year earnings outlook. With the company's fiscal 2013 set to end on January 31, Tiffany now expects net profits in the range of $3.65 to $3.75 per diluted share. That's a $0.15 improvement over its previous forecast. Shares of Tiffany are trading near a 52-week high around $88 apiece, which may compel some investors to steer clear of the stock heading into the New Year. After all, doesn't the axiom go, "Buy low, sell high"?

While this is generally true, there could be much more upside for Tiffany in the year ahead. Let's dig a little deeper to uncover why Tiffany should continue to outperform in 2014.

Hidden treasure and fresh talent
Brand identity is one of the key things Tiffany has going for it, yet it's not something you can quantify on a balance sheet. It's hard to find a stronger brand than Tiffany & Co., which has been around for 176 years. It is because of this brand equity that Tiffany is able to command premium pricing, despite the fragile economy. This, together with new talent at the executive level, should carry Tiffany to new highs in the quarters to come.

The jewelry chain recently appointed British jewelry designer, Francesca Amfitheatrof as its new lead design director. The hire is an important one for Tiffany because it finally fills the void that was left when John Loring retired from the position more than four years ago. On top of this, Amfitheatrof's background, not only as a celebrated jewelry designer but also a silversmith, is well matched to Tiffany's growing silver business.

In addition to a new creative director, Tiffany also welcomed Anthony Ledru earlier this year as its new head of retail for North America. Ledru brings valuable experience from other luxury retailers including Harry Winston and Cartier with him to Tiffany. Looking ahead, his presence should be instrumental in reviving Tiffany's U.S. business, which has fallen behind in recent years.

Another dazzling stock pick for 2014
Coming off a solid third quarter, the New York-based jeweler should shine even brighter in 2014 thanks to ongoing brand strength and its new team of top talent. But there is another stock that investors will want to own heading into the New Year. The Motley Fool got its best analysts together to find the No. 1 stock for 2014. Find out what company made the cut in our new free report "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!