Saturday, May 19, 2007

Cosmetics Stocks: Looking Good

All you have to do is thumb through women’s magazines to see that the cosmetics, makeup, and skincare industry is big business. I looked through my wife’s Glamour Magazine and discovered that there are 16 pages of ads, mostly for cosmetics, before you even get to the table of contents. Here is a list of companies in that industry that are worth taking a gander at. I have excluded the large conglomerates, such as Unilever NV (UN) and Procter & Gamble Co. (PG) to focus more on the purer plays

Estee Lauder Companies Inc. (EL) has various brands including Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, American Beauty, and Good Skin. Their forward P/E is 19 and their PEG is 1.75. They just reported their earnings showing a quarterly earnings growth year over year of 58%. The yield on the stock is 1.1%.

Avon Products Inc. (AVP) is a well known multilevel marketer of cosmetics, fragrances, skin care, and toiletries, along with various other products. They recently reported that their first-quarter profits nearly tripled. Their P/E is 39, with a forward P/E of 20. The PEG is 2.1, and the company pays a yield of 1.9%. The short interest ratio is 2.2, and the short interest has dropped by 4.5%.

Revlon Inc. (REV) sells cosmetics, skincare products, perfume, and other personal care products through mass volume retailers, pharmacies, supermarkets, and department stores. It might not be considered a small cap as such [market cap over half a billion dollars] but it sure has a small stock price, selling for less than one and a half dollars per share. Earnings have been negative, and the company has $1.4 billion in debt. Interestingly, the stock is owned by Ron Perelman, Del Mar Asset Management, and Eaglerock Capital Management.

L'Oreal Co. ADR (LRLCY.PK), based in Paris, France, is the largest cosmetics company in the world. It has a forward P/E of 23 and a PEG of 2.5. Their ADR’s trade on the pink sheets.

Shiseido Co. Ltd. (SSDOY.PK), based in Japan, is the oldest cosmetics company in the world, founded in 1872. Their products include Pureness, The Skincare, Benefiance, Bio-Performance, Suncare, and White Lucent. The stock trades on the Pink Sheets and unfortunately difficult to get financial information on.

Author doesn’t own any of the above.

3 comments:

Matt Holton said...

Thanks for the post. Very informative

Afterglow Cosmetics said...

It is also nice that most of these companies mentioned are making a large shift towards creating and manufacturing organic cosmetics. Now that we have the knowledge to make more effective, natural makeup.. everyone will soon jump on to create makeup that people can enjoy as well as feel safe about putting on each day.

organic cosmetic brushes

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