The latest promotional campaign for the Motley Fool’s Stock Advisor newsletter is perhaps a bit more honest than most …

… they make it clear up front that they’re going to tell you about a few ideas for free, but that they’ll just tease you about their favorite pick and will only give it to you if you sign up for their paid newsletter.

Which is exactly what the other publishers do, of course, so no surprise there — but at least they were clear about it from the first paragraph of the email ad.

The pitch is that they’re recommending …

“The One Stock Millionaire Investors Want to Keep to Themselves”

And

“The Secret Stock of the ‘One Percent'”

So naturally, we want to know what it is. And we don’t want to sign up for a subscription to their newsletter to find out, no matter how friendly they are about refunds (that’s just now how we’re wired here at Stock Gumshoe — we see riddles, we want to solve ’em).

The idea is that the luxury market will see a tremendous boom as the global economy recovers — and indeed, that it’s already doing fine and will only get better (the 1%, after all, are not facing a foreclosure crisis). I don’t think I’m quite in that 1%, though perhaps I’ll be there shortly if I can just figure out what stock to buy next …

And as promised, they spit out a few “luxury” picks that are Stock Advisor recommendations, gratis — the freebies, to save you a few minutes reading the ad, are Boston Beer (SAM), Williams-Sonoma (WSM), and BMW (BAMXF on the pink sheets). So you can see the definition of luxury is a fairly broad one — retailers and brand names that appeal to the upper echelon of consumers.

They also make a point of saying that there are plenty of “pretenders” to the luxury throne — companies that dilute their brand with junk, or who try to become luxury by overzealous marketing or what, at heart, are shoddy fad products. So that’s the threat: without the Foolies, you might pick the wrong stock to profit from the boom in global luxury brands.

And the promise? Well, that’s their “stock for the 1%” that they tease thusly:

“BUILT TO LAST: ONE LUXURY STOCK FOR THE AGES

“This luxury consumer brand was founded during World War II by six artisans working in a tiny, family-run workshop in New York. Today, the company operates more than 700 stores throughout the world where its assortment of prestige goods attracts legions of logo-loyalists. Hobnobbing at the upper-end of the fashion accessory spectrum, the company has done a masterful job of retaining its luxury brand status while expanding its customer base. And it is really expanding. The recent roll-out of men’s products has been nothing short of dynamite, and has fortified the company’s fashionable standing on both sides of the gender line.

“Led by a long-view CEO and girded by an outstanding operational model — with multiple sales channels, offshore manufacturing, superior branded product lines, consistent innovation, and a passion for customer service — the firm delivers an extremely profitable financial model. Over the past 10 years, it has improved its business in essentially every important financial category: revenue, revenue growth, operating margin, net margin, and return on assets. Add to these industry-leading numbers the fact that the company has a hoard of cash and very little debt, and you’ve got an investor’s luxury dream stock.

“But all these strengths aside, the consideration that has David and Tom Gardner so excited about this company right now is its global promise. After all, if there’s one factor that turns a great luxury brand into a great luxury growth brand, it’s international positioning.

“Over the past few decades, the global market for luxury goods has absolutely exploded. This is not just in Japan, where brand-conscious upper-class consumers have long embraced name fashions from the west. China and India, too, are becoming promising markets for luxury goods, and the oil-rich Middle East is right there with them. Discretionary incomes are on the rise in many parts of the world, and as the wealthy get wealthier, it’s a boon for luxury goods companies with an international foothold.

“‘The luxury goods sector in the emerging markets is a robust place to invest,’ says Matthew Deeprose of the international-focused Dominion Funds group, ‘because, while the demand for aspirational goods and lifestyle products is healthy in the west, the demand from the developing countries is off the scale.’

“Already well-established in Japan, and now making serious in-roads in China and the Middle East, the company we’re talking about here is perfectly positioned to take advantage of the suddenly ravenous global hunger for luxury brands. This is the catalyst that makes this a must-buy stock now.

“And that’s why you owe it to yourself to get the full, FREE report on this luxury brand immediately — while Wall Street and the rest of the investing world are still paralyzed by ‘economic meltdown’ thinking.”

So you can sign up for that FREE (withpaidsubscription) report if you like, but if you just want to learn the name of the stock and do your own research … well, just wait a sec while I toss those clues into the Thinkolator, wait for our little bell to ring to tell us it’s cooked up just right, and open the door to see that the pick is … Coach (COH).

Yep, you’ve heard of ’em. Me too. They are arguably the most “American” of the growing global luxury brands, though I suppose Tiffany might argue that point. And Coach was founded in the 1940s by six leather-working artisans in New York who churned out high-quality, in-demand products — in a loft where Coach’s headquarters still are today.

They seem to have pretty nimbly walked the tightrope to balance mass appeal, revenue growth, and brand protection to build quite a powerhouse over the last decade or so — before that they were quite small and had a very niche focus on plain, sturdy leather handbags. The couture aspect of over-the-top design has expanded their top end as they compete with the Guccis of the world, and they’ve continued to expand their outlet business to sell less-fancy products at much lower prices. I’d be worried that they lose exclusivity as they sell $150 handbags with a plastic sheen at the local Tanger Outlet Center, but apparently they’ve done it well.

Coach, like Tiffany (TIF) and most of the other luxury brands you could probably name off the top of your head, is trading at a bit of a luxury price, but it’s more Cadillac than Rolls Royce — the stock is changing hands now for about 18 times next year’s earnings (the trailing PE is about 24), and analysts think the growth will stay in the low-teens for years to come (The PEG ratio, PE dividend by growth rate, is around 1.3 — neither ridiculously cheap nor crazy expensive by most folks’ standards).

“Selling stuff to rich folks” has certainly been a good strategy for many — the crafter brewers like Boston Beer have definitely done very well, as have other past Fool picks in the area like Whole Foods Markets (WFMI), though for the single brand firms like Coach or Tiffany there’s always the risk that the brand can suffer from quality problems, or oversaturation, or whatever else (even being overly focused on one market, as Tiffany found when their Japan focus became a drag instead of a booster for a while). That said, all of the big global luxury brands are a little worried about Europe and are looking to China, India, Brazil and the other emerging markets for their growth — the 1% will be fine in the US and Europe or anywhere else, but the 5% and the 10% who fill their baskets at the outlet stores might be watching their bottom lines a little more closely.

I’ve never owned Coach and the stock I’ve been most tempted by in the luxury brand space lately has been Diageo (DEO), but maybe that’s just because I’d rather a stiff Johnny Walker Blue than a new wallet at the moment. If you’ve got an opinion on Coach or your other favorite stock for “the 1%”, well, just let us know with a comment below.

And if you’re one of the many Gumshoe readers who has tried out the Gardner brothers’ newsletter, please click here to review Motley Fool Stock Advisor for your fellow investors (you an also see a few of the recent reviews over to the right of this article). Thanks!