Blue Nile, Inc. (NASDAQ:NILE)

owner ceo

While NILE at a 30X P/E is certainly not cheap it's trading at about 1/3 of where it was a few of years ago when the economy was strong and almost where it was at the depths of the recession when all looked hopeless. I liked the business but not the stock when the ecnomomy and their customers were doing well. I still like the business and see now as the right opportunity for the stock. It looks like their business has mostly gone sideways over the last few years however given the headwinds they faced I take that as a sign of strength. High end retailers have done well in the recovery so far but customers who are cost conscience not so well. I see NILE's business picking up once the economy is on a more robust recovery path and people who have to think about whether they can afford a wedding right now and how much they want to pay for a ring can relax. Since CAPS points depend on outperforming the S&P and even after the recent correction the S&P has held up fairly well lately I think now is a good time to add NILE to my CAPS portfolio.