Revlon, Inc. (REV)

Cheap makeup in a bad market, look for REV to capitalize for the time being.

I see dilution as the only way to pay back some of their debt. They won't go BK, but current shareholders will not participate in that success story.

tenmiles

Gee, pretty dang resistant in the sell-off.

how in the hell did this ever go over 10$ to begin with?
and 16$?!?!?! WTF>

I clearly thumbed this down at the wrong time. However, NOW I think the stock has hit the top. Pretty amazing run up.

The day after tomorrow is the third day of the rest of your life.

It's really hard to imagine what is getting people so excited about a negative equity company with a massive debt load and a poor history of profitability that sells a number of non-essential consumer items. It's true that some of their products might fit into the consumer staples category, but buying Revlon isn't exactly like buying Johnson & Johnson (JNJ) or Colgate-Palmolive (CL).

Even if REV were to reach record levels of profitability from here and earn $2 per share on average for the next decade, I'm still not sure it's worth much more than the current price. Which is to say, I'm not 90%+ sure this is overvalued, but I feel like even if it's not, it's difficult to argue that a fair valuation price is much higher than $20. More realistically speaking, it's probably worth less than $10 given the debt load and even that may be a stretch.

Telechart Pick

Too far too fast. See Ultralong regarding the balance sheet.

tenmiles pick... overexuberance usually works itself out

this company is going down!

right now this pig has a lot of lipstick on it!

Seriously, has anyone noticed the last stock exchange when Revlon restructured with thier major creditor?

Mu understanding is that every share of common stock was redeemed for a preferred share paying a quarterly dividend of, well here is a direct quote
"Because the liquidation preference of the Series A Preferred Stock has been increased by $1.50 to $5.21, holders of the Series A Preferred Stock will no longer have the right to receive a special dividend of $1.50 if Revlon does not engage in a change of control transaction within two years of consummation of the Exchange Offer.
Holders of Series A Preferred Stock will receive cash payments of approximately $7.87 per share (instead of $7.10 per share, as previously proposed) over the four-year term of the preferred stock, through the payment of the $5.21 per share liquidation preference at maturity (instead of $3.71 per share, as previously proposed) and 12.75% annual dividends payable quarterly in cash, equal to approximately $0.17 per share quarterly (instead of dividends of approximately $0.12 per share quarterly and a $1.50 per share special dividend at the end of two years, as previously proposed). These per share calculations assume that Revlon does not engage in one of certain specified change of control transactions, which, as described below, may lead to a higher payment.
If Revlon engages in one of certain specified change of control transactions within three years of consummation of the Exchange Offer, holders of Series A Preferred Stock will have the right to receive a special dividend, capped at an amount that would provide aggregate cash payments of up to $12.00 per share (including the liquidation preference and any dividends paid or payable in respect of the Series A Preferred Stock). As previously proposed, holders of Series A Preferred Stock were only entitled to such payment if Revlon engaged in one of certain specified change of control transactions within two years of consummation of the Exchange Offer, although holders of Series A Preferred Stock could have effectively extended this right for one year (and during such third year their right to receive such special dividend would have been capped at $12.50 per share) by converting their Series A Preferred Stock into Series B Preferred Stock and giving up the $1.50 special dividend to which they would have been entitled after two years".

Revlon is currently working to restructure all of their long term debt to make it more manageable, over the long run this will allow them cover their short term debt. As another fool has said can you tell the difference from Estee Lauder (high end cosmetics) versus Revlon (low end cosmetics)? Women will always purchase lipstick...especially when the economy is bad, have you l;ooked at the unemployment numbers lately?

Enormous debt. Ok, now they do have lower interest expenses, but even if there was no interest and they had consistently strong EBITDA quarter after quarter, it would still take years until they get back to positive equity. Plus this is overbought.

Low P/E with Movement Potential

Horrible fundamentals, inevitable drop.

I own REV :-

http://finance.yahoo.com/q?s=rev&.yficrumb=yIQAwlz5SoW

Industry: personal & household products
EPS = 0.91
PE = 11.8 Industry 16.7
PB = na Industry 1.4
PS = 0.43 Industry 0.7
P/CF = 11.7 industry 16.0
P/FCF = 11.6 Industry 16.4
Yield 0.0 Industry 0.0
Gross profit margin = 63.0 Industry 49.5
Operating margin = 12.5 Industry 4.0
Net Profit Margin = 3.7 Industry 1.8
ROA = 5.9 Industry 0.7
ROE = -4.4 Industry 10.3
Insider ownership = 60.8
Greenblatt ROC = 68.10
Greenblatt Earnings Yield = 9.06
PosFCF generic % free cash flow yield 8.63%***
Passes 16 of 17 of Mike Klein's metrics
MaxPrice = 60.08 Discount 82%**
Metrics from qtr ending 9/30/2009
Caps rank 1
http://caps.fool.com/Ticker/REV.aspx
MC score 269

All good enough for my money. I only suggest stocks that I own !

(See posts 388/584/665/760/1051/1807/2213/3546/3755/4046/4208/4225/4345/4573/4818/5241/5242/5310/5461/5579/
5169/7651 on 'Investment Analysis Clubs / Dynamic Value Investing ' board for extra due diligence applied ). **MaxPrice is a generic version of Mike Klein's Maxprice and ROC and Earnings yields are generic versions of Greenblatt's metrics. *** PosFCF generic % free cash flow yield taken from AAII and posts 5248 and 5253

See 'Investment Analysis Clubs / Dynamic Value Investing' board and my CAPS profile for further excellent companies selling at a discount to Maxprice with excellent current metrics. CAPS only shows my selections over 100Mill (unfortunately due to restricted lower market cap applied by MF CAPS).

As stated on the 'Investment Analysis Clubs /Dynamic Value Investing' board my aim is to obtain up to 50% returns p.a. as Buffett stated he could obtain (3 times) recently. A very difficult task but you can follow along with my buys and sells on my CAPS page, where I put my money where my mouth is . If I perform well I hope you can benefit. If not , feel free to ignore my comments. CAPS allows each and everyone of us to be clinically judged on our stock picking abilities over the LONG TERM.

Please always do your own due diligence before investing.

Manucastle :o)

Limited cosmetic appeal north of $13