Tuesday, November 5, 2013

A Quick Look at the European Personal Products Industry

In the wake of management's improved outlook for Beiersdorf and the stock's subsequent one-day gain of 5.3%, we wanted to take a closer look at it's peer group.
After years of languishing in a trading range, European Personal Products companies broke out in 2012:
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While companies' relative stock performance became a bit extended on a technical basis, prices have moderated--but, importantly, have not violated support--so far in 2013:

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In addition to a strong balance sheet, Beiersdorf also manages to outspend its European rival, L'Oreal, on one of our favorite metrics: intellectual property.

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Meanwhile, L'Oreal boasts 70%+ gross margins, the lowest financial leverage among global peers, and impressive growth in spending on intellectual property over the last decade:

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