1-Star Stocks Poised to Plunge: Estee Lauder?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cosmetics giant Estee Lauder Companies (NYSE: EL  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Estee Lauder's business and see what CAPS investors are saying about the stock right now.

Estee Lauder facts

Headquarters (Founded) New York (1946)
Market Cap $22.4 billion
Industry Personal products
Trailing-12-Month Revenue $9.4 billion
Management CEO Fabrizio Freda (since 2009)
CFO Richard Kunes (since 2004)
Return on Equity (Average, Past 3 Years) 28%
Cash/Debt $999.1 million / $1.2 billion
Dividend Yield 0.9%
Competitors Coty
L'Oreal
Procter & Gamble

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 28% of the 222 members who have rated Estee Lauder believe the stock will underperform the S&P 500 going forward.

Earlier this month, one of those Fools, All-Star Loerke, touched on Estee Lauder's seemingly unsustainable valuation:

Decent earnings growth, but the price has gotten out of control, having [nearly doubled] in 2 years. I can't imagine that the number of women wearing cosmetics has also doubled. You can't put lipstick on this pig.

What do you think about Estee Lauder, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Procter & Gamble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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