Anant Vijay

Revlon's Debt Will Lead The Share Price Higher

Revlon (NYSE:REV) recently underwent a fairly taxing privatization case with the SEC. After the company settled with a fine, investors re-assessed their view and the stock treaded higher. The company currently trades at a P/E ratio of approximately 33x, up from an average of 14x over the last five years. The ratio was depressed, in part, of the large debt burden on Revlon's sheets. As of March 28, 2013, Revlon had net debt of approximately $1.16 bn (in contrast with a market cap of $1.18 bn). My idea for the article came to me when I noticed how badly the market was undervaluing the company in comparison to some of its closest peers and the overall fundamentals of...

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