Renowned investor Eddie Lampert, founder of hedge fund ESL
Investments, found only one new stock for his extremely
concentrated portfolio of 12 stocks: Avon Products Inc. (
). He bought 145,922 shares at an average price of $19.
Avon Products Inc. is one of the world's manufacturers and
marketers of beauty and related products, which include
cosmetics, fragrance and toiletries; beauty plus which consists
of jewelry and accessories and apparel; and non-core which
consists of gift and decorative and home entertainment products.
Avon's stock became substantially cheaper in recent years,
dropping 53% over the last five years and 26% over the last year.
In April, it had a change of leadership. Johnson & Johnson's
Sherilyn McCoy replaced Andrea Jung, who had led the company
since 1999, as CEO.
The company's revenue has been growing for the last ten years, as
earnings have declined annually since 2008. The source of the
revenue has been changing over the years, as Brazil has become
Avon's largest market and Latin America showing the fastest
growth. In 2011, Avon's Latin American revenue grew almost 11%,
and North American revenue declined 5.8%.
Eddie Lampert has a history of buying large stakes in retail
companies and pushing for change, as he is in the process of
doing with Sears Holdings (
). The Avon stake, however, is too small to be an activist
position and is his small holding in his portfolio.
Avon Products Inc. has a market cap of $7.03 billion; its shares
were traded at around $16.02 with a P/E ratio of 15.2 and P/S
ratio of 0.6. The dividend yield of Avon Products, Inc. stocks is
5.7%. Avon Products, Inc. had an annual average earnings growth
of 2.8% over the past 10 years. GuruFocus rated Avon Products,
the business predictability rank of 3-star
See Eddie Lampert's portfolio here. Also check out the
Undervalued Stocks, Top Growth Companies, and High Yield stocks
of Edward Lampert.
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