Estee Lauder (EL)

Estee Lauder (EL-N) or Tiffany & Company (TIF-N)? 2 very different companies and you would invest in each for different reasons. This company had a very, very weak quarter and hasn’t really recovered from where it was trading in the mid-$70. Very good company with a good product line. Has high margins. Big exposure to the Asian consumer which is an area where you have to be cognizant and perhaps worrisome about. Great products and has a very, very strong balance sheet.

Quite an amazing little company. Biggest market in face and skin creams. Prestige beauty market is growing and these guys are growing faster. Owner is 75 years old and there is potential for a takeout but that is not why he buys it. Diversity of brands and countries.

In 2010 they purchased a cosmetics company and doubled since then. The valuation is expensive and is on the 20s on a PE level. One step back along the supply chain is International Flavors Fragrances and (IFF-N) and is a better way to play it.