By Larry Gellar
Estee Lauder (EL) was upgraded by Stifel Nicolaus and given a price target of $113. The company’s market share is rapidly increasing and could benefit from an improved economy. As for recent performance, the stock has been about flat lately. Meanwhile, the company is stepping up its plans for Breast Cancer Awareness Month in a big way. Senior Corporate Vice President Evelyn Lauder had this to say:
I’m thrilled to kick-off our 2011 BCA Campaign with several first-ever initiatives, bringing millions together with the single-minded goal of spreading the life-saving awareness message about the importance of breast health and early detection the world over.
The company is also starting a YouTube channel designed to promote its products, and we think this could have a huge positive impact on sales. It’s about time that this company moved into the 21st century. Other players in the industry for personal products include L’Oreal (LRCLY.PK) and more importantly, Procter & Gamble (PG). Procter & Gamble is cheaper than Estee Lauder using ratios such as price to earnings, price/earnings to growth, and price to sales. It also has a better operating margin, although Estee Lauder’s gross margin is higher. At 12%, quarterly revenue growth (year over year) has been strong.
Expedia (EXPE) was upgraded by Piper Jaffray and given a price target of $33. Spinning out TripAdvisor figures to add value to EXPE, and increases in international travel don’t hurt either. In fact, the company has been particularly successful with bookings for Mexico. Here’s what Marco Tagliatti, a vice president at Expedia, had to say:
Bookings made on Expedia to Mexico grew more than 30 percent year over year in the second quarter of 2011, and Expedia's commitment to Mexico has also grown as we continue to work closely with the Mexican tourism industry to promote travel to the country by travelers from around the world.
Meanwhile, Google (GOOG) has been coming under fire for allegedly “cooking” its search results. Many are accusing the company of always putting its own services third in search results, while competitors tend to fluctuate where they appear. (Note that while Expedia competes with Google Flights, many aren’t very impressed with Google’s newest offering). Besides Google, Orbitz Worldwide (OWW) and priceline.com (PCLN) are two other companies that compete with Expedia. EXPE is average for statistics like operating margin, price to earnings, price/earnings to growth, and price to sales, although gross margin is particularly strong at 79.61%.
Green Mountain Coffee (GMCR) was rated Buy by Argus and given a price target of $130. The company’s innovative K-cups are becoming increasingly popular, and people are spending more on coffee. Green Mountain has also had great success with what is known as fair trade coffee. Here’s what Lindsey Bolger, a senior director at Green Mountain, had to say:
At GMCR, fair trade coffee is part of our company heritage. As the largest purchaser of Fair Trade Certified coffee in the world, we are dedicated to producing high-quality, sustainably-sourced coffee for our consumers while helping provide a higher quality of life to farmers across our supply chain.
Green Mountain has also won the Humanitarian of the Year award from Medicines for Humanity. This prestigious honor was given partially on the basis of Green Mountain’s philanthropy in Africa. Important competitors for Green Mountain include Farmer Brothers (FARM), Peet’s Coffee & Tea (PEET), and 800 lb gorilla Starbucks (SBUX). Green Mountain is currently trading at a whopping 101.72 times earnings and 6.90 times sales. Price/earnings to growth ratio is more reasonable though at 1.68. Operating margin is also quite strong at 13.82%, although gross margin of 33.04% is more in line with the rest of the coffee industry.
Marvell Technology (MRVL) was upgraded by UBS and given a price target of $19.50. Earnings estimates were also increased, as the company’s networking and storage business continues to thrive. This stock has been pretty volatile lately, although the company recently received a Supplier of the Year award from Cisco (CSCO). Here’s what Marvell co-founder Weili Dai had to say:
It is such an honor for Marvell to receive this prestigious award from Cisco, the world leader in networking. When we see our customers and partners succeed, we feel great pride and a sense of accomplishment because we focus on their success. This award can be attributed to our core business philosophy of 'win-win.'
In fact, Marvell’s also having some great success with the chips it provides for mobile phones. These chips are some of the highest quality in the industry right now. Important competitors for Marvell include LSI (LSI), STMicroelectronics (STM), and Texas Instruments (TXN). Those companies are trading at lower price to earnings and lower price to sales ratios than Marvell. On the other hand, gross margin for Marvell is quite strong at 58.56%. Statistics like operating margin and price/earnings to growth ratio are closer to average. Additionally, quarterly revenue growth (year over year) is only 0.10%.
United Technologies (UTX) was upgraded by Morgan Stanley and given a price target of $95. Buying Goodrich (GR) should add value to United Technologies, and an improving economy will greatly help this stock. On the other hand, many investors have turned their attention to Boeing (BA), which is finally delivering its first 787. Also known as the Dreamliner, All Nippon Airways will be the first to fly the coveted airplane.
As for actual news about United Technologies, investors are continuing to speculate about the Goodrich deal. Here’s what we do know: The company will be bought for $16.4 billion in cash, which means UTX will have to put a hold on its stock repurchase program and dip quite a bit into its cash reserves. That has some analysts worried, and while Morgan Stanley did upgrade UTX, there are plenty of analysts out there who did the opposite. We’ve talked about Boeing a little already, and General Electric (GE) is one other big competitor for United Technologies. General Electric is cheaper using a variety of ratios, including price to earnings, price/earnings to growth, and price to sales. On the other hand, United Technologies’ operating margin is quite strong at 14.34%, while gross margin is less so at 28.19%.