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JimVanMeerten (62.35)

Estee Lauder is more than make-up on a pig

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January 22, 2010 – Comments (0) | RELATED TICKERS: EL

Sometimes a stock comes up on my Barchart screening for stocks hitting new highs just out of the blue. Estee Lauder (EL) might be more than just shear illusion and might actually be a thing of beauty. We all have heard the name and if you look in your wife's cabinet you will probably find the products. Before you think I'm sexist they also make Aramis; and I've been using those products since I was in college. So maybe I change my title to "Just make-up on a boar"


Estee Lauder Co. manufacturers and marketers of skin care, makeup, fragrance and hair care products. Brand names include Estee Lauder, Clinique, Aramis, Prescriptives, Origins, M.A.C, Bobbi Brown essentials, La Mer, jane, Aveda, Stila, Jo Malone and Bumble and bumble. The company is also the global licensee for fragrances and cosmetics sold under the TommyHilfiger, Donna Karan and Kate Spade brands. You can't walk through Nordstroms without being sprayed with one of their products.

I first noticed the stock because all of Barchart's 13 technical indicators signaled a 100% buy rating. The stock hasn't closed below its 50 day moving average since back in October of last year and has had a 30.77% price appreciation in the last 65 days.

On a fundamental basis analyst expect the stock to have a 5.3% increase in revenue next year and a 15.7% earnings increase. The best part is they expect that EPS increase to continue for the next 5 years at that same rate. There are 6 major buy recommendations and 9 analysts have increased their earning projections in the last week alone.

On other sites Wall Street Survivor readers give the stock a 5/5 Survivor Sentiment followed by a 4/5 fundamental rating and a 5/5 technical rating. Motley Fool CAPS members think the stock will out perform the market by a vote of 123 to 7 with the All Stars in agreement 40 to 15.

Warren Buffett always says he doesn't buy stocks he buys companies he understands and that he will want to hold for a lifetime. This company has seen a lot of competitors come and go and is still around to make us all appear a little bit above average.

Recommendation: Buy Estee Lauder below 55 with a stop loss no lower than 48.

Jim Van Meerten is an investor who write about financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Disclosure: No positions in EL at the time of publication

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