1-Star Stocks Poised to Plunge: Revlon?
By
Brian D. Pacampara
November 5, 2009
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Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, beauty products maker Revlon (NYSE: REV) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Revlon's business and see what CAPS investors are saying about the stock right now.
Revlon facts
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Headquarters (Founded)
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New York City (1932)
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Market Cap
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$545.1 million
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Industry
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Personal products
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Trailing-12-Month Revenue
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$1.29 billion
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Management
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CEO Alan Ennis (since May 2009) CFO Steven Berns (since April 2009)
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Revenue and Net Income Growth (Over Last Year)
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(7.2%) and (45.9%)
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1-Month Return
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117.5%
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Cash/Debt
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$62.5 million / $1.28 billion
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Other Highly Rated Personal Products Stocks
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Procter & Gamble (NYSE: PG) Colgate-Palmolive (NYSE: CL) Kimberly-Clark (NYSE: KMB)
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CAPS Members Bearish on REV Also Bearish on
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Targacept (Nasdaq: TRGT)
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CAPS Members Bullish on REV Also Bullish on
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General Electric (NYSE: GE) Citigroup (NYSE: C)
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 45% of the 160 members who have rated Revlon believe the stock will underperform the S&P 500 going forward. These bears include isavchuk and UltraLong, the top ranked member in all of CAPS.
Just yesterday, isavchuk cautioned Fools that the stock could easily smear a perfectly fine portfolio: "Relative to its industry, Revlon has average margins, average growth, below average financial efficiency, and a HUGE debt. 'Cigar Butt'? At $2/share maybe."
In a pitch from two days earlier, UltraLong also warns against putting lipstick on Revlon's pig of a financial position:
Ya know, everyone is just applauding this earnings report as the second coming … did anyone actually scroll to the bottom where they have balance sheet facts and notice those little words on the left hand side? "Stockholder deficiency"! This is usually where the phrase stockholder EQUITY is! This is a good indication that there is ZERO equitable value in the company despite their profit. They have a mind-boggling, earth-shattering, camel crushing 1.28 BILLION dollars in debt.
What do you think about Revlon, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!
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