Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Helen of Troy
So what: Helen of Troy already provides a vast array of household and personal care products, but with this transaction it can now add the licensing rights to Vicks and Braun, products from Procter & Gamble
Now what: Helen of Troy has a long history of successfully purchasing and integrating strong brand names into its portfolio. It has been on an acquisition spree over the past few years, which can quickly add to revenues but leaves me concerned about true organic growth. Don't get me wrong: Acquisition growth is growth, but with mid-single-digit growth expected in fiscal 2011 before this transaction, and the prospect of taking on more debt to finance the purchase, today's move doesn't exactly make me press the buy button. Helen of Troy should be given a chance to show it can create value from today's purchase, and I'd rather wait a little.
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