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Calling All Aspiring Cosmeticians (EL)

Posted on May 3, 2021

We begin with the following mantra –

“Make-up, hair spray, skin cream, smells!”

Repeat.

Remember also to focus equally on the physical and character deficiencies of your customer.

And never forget stock price; buy it, willy-nilly, with all your extra earnings.

If you’re rich, it doesn’t matter how you look.

The stock under consideration today is none other than Estee Lauder (NYSE:EL), makers of lipstick and blush – but with a stock market cap of $115 billion!

Now, we’re not opposed to women dolling up – in fact, we rather enjoy seeing the Mrs. in her haut couture best.

But when the purveyors of powders, polishes and parfums start pretending they’re Microsoft, well… we feel a fella’s gotta put his foot down.

Companies with values that size belong exclusively to the tech realm, in our chauvinistic opinion.  And, as you know, eye-shadow and lip-gloss happen to be among the least technical items on sale anywhere.

Have a look now at some fundamental numbers.

  • To begin, Estee Lauder’s P/E is a very rouge 125.57(!),
  • Her Dividend Yield is 0.68%, and
  • Her Price to Book ratio is a rather chubby 21.02.
  • Moreover, earnings this year declined by a smudged-up 61.40%, and
  • Insiders offloaded 81.40% of their holdings in the last six months!  That amounted, by the way, to a $1.2 billion hairdo.  (You read that right – billion.)

When the insiders recognize the stock is starting to behave like TESLA, and they act on it, you know something is up.

Have a look at the chart –

With kind regards,

Hugh L. O’Haynew

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