The $10 billion offer for Avon Products (
) by the world's largest fragrance
company Coty demonstrates the profit potential of
investing in companies that provide goods and services to
emerging market middle classes.
[caption id="attachment_55112" align="alignright" width="220"
caption="Avon CEO Andrea Jung is making calls in 100 countries"]
[/caption]This is why consumer product conglomerates such as
) and Nestle (
) have performed so well over the last year. Unilever has risen
11.17%, and at $61.67 a share, Nestle is close to its 52-week
high. It is also a reason why
Warren Buffett invests
so heavily in consumer giants with a global footprint.
Jim Jubak agrees
60% of Avon's sales
and most of its revenue growth come from emerging markets. Avon's
sales have increased by 5.2% over the past five years.
Unilever has achieved similar growth over that same period,
and both its sales and earnings-per-share growth are rising on a
quarterly basis. While the Great Recession did not help these
companies, the consumer class around the globe still grew during
that period, which is very bullish for their long term