Well, as to when to buy, it depends on what you think AVP can do with its margins and growth. Right now, people are very bearish and sour on this question for AVP.
shares outstanding * EPS = earnings
earnings/revenue = net income margin
Using Yahoo data for the current year, I get these numbers:
EL 5.3% REV 5.3% RDEN 4.7% AVP 4% TUP 10.7%
So the numbers are saying AVP has become a laggard on margins.
I think if you look at EL, the market is saying that 5.3% margins are fine as long as revenue is growing. Analysts are predicitng about 7% growth for EL, as opposed to less than 3% for AVP. EL forward PE = 20, AVP forward PE = 13.
I threw TUP into the mix to show that nice margins are possible with the direct selling model. Right now AVP is getting worse margins with direct selling than brands that sell through stores. Eight or 9 years ago, AVP was like TUP, geneating premium margins through direct selling, but it has slowly but surely given that performance up.
As I've said on the AVP board all along, the price to sales ratios for AVP, and really REV and RDEN too, are compressed pretty far below 1, so we are well leveraged to any improvement in margins, should that happy day ever come.
Do you think AVP can get its mojo back? That's the question.