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Avon Products Inc. Message Board

  • jmedwick jmedwick Nov 29, 2012 11:53 AM Flag

    Where are you Ron Perelman??

    Revlon/Avon wedding bells?

    Sentiment: Strong Buy

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    • The Revlon-Avon horse race is very interesting to watch.

      Avon is a much bigger company, but Revlon is more successful financially.

      Wall Street keeps pushing AVP down, and the two stocks may close today at parity for their price to sales ratio of .56. AVP is already much cheaper by the EV/sales metric, so AVP may be on its way to becoming the cheapest valued cosmetic company in the US using these two basic metrics. REV is cheaper using the PE ratio. I think REV would be valued even more highly than AVP if it were not a captive entity.

      Wall Street predicts REV will earn $1.73 next year, which will be a 6% net income profit margin. Meanwhile AVP is predicted to earn $.92, which comes out to a profit margin of 3.6%. REV earns superior margins even though it has a much heavier debt load (using debt expressed as a percentage of revenues).

      AVP really needs to get its act together. This perpetual fooling around just doesn't do, as the English would say. The company may have to make some basic existential decision about direct sales in the US. What's the point if the margins aren't there? Are the sales ladies getting good support and leads or is it a lonely Death of a Salesman type of ordeal?

      Sentiment: Hold

    • Two wrongs don't make a right. AVP needs a stronger competitor buying the company.

      Sentiment: Hold

 
AVP
9.97-0.99(-9.03%)Oct 30 4:03 PMEDT

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