It's not as if cosmetics companies haven't performed well. Estee Lauder (EL) is up 24% for the past year, Revlon (REV)is up 33%, and L'Oreal (LRLCY) is up 45% over the same period. Estee Lauder has a market cap of $16 billion and 23 analysts following it, while Revlon is similar in size to Coty with a $1 billion market cap and it only has two analysts. Coach (COH) is a similar size to Estee Lauder, but it has twice the amount of analysts, 39, covering it. Solar City has the star power of Elon Musk and while it is a little larger than Revlon, with a $2 billion market cap, the company has 8 analysts following it.
How bad is it? Well, strip club Rick's Cabaret (RICK) has only an $81 million market cap, but manages to have an analyst. Calloway Golf (ELY) comes in with a market cap of $469 million, but a posse of nine analysts. Boston Beer (SAM) has a $2 billion market cap and it has 7 analysts. The global cosmetic market generates $243 billion in revenue each year with annual growth of 3%. Golf only delivers $25 billion in annual revenue. Most analysts are men, so it follows that they prefer to cover companies that are familiar and comfortable. The percentage of women that are Chartered Financial Analysts is only 20%.
Admittedly Coty has had some stumbles ahead of its IPO, but the future looks very bright. Coty will probably have a tough time getting analysts' attention, but investors that know cosmetics will smell the cash that comes from Coty.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV