Robert Way
L'Oreal SA (OTCPK:LRLCY) has been facing headwinds in the North Asian region, with sales declining 3.1% YoY in the first half of the year, despite double digit growth in almost all other geographical regions.
With China being
L'Oreal Faces Beauty Market Setback In China: Here's Why I'm Holding
Summary
- L’Oréal's sales in North Asia fell 3.1% in H1 2024, with China being the main driver due to weakening in consumer spending.
- Luxury beauty brands like Lancôme are struggling in China, with travel retail in Hainan down 30%. Management is shifting towards more affordable products in this region.
- I believe that the stock is fairly priced compared to its five-year average, limiting upside potential.
- I rate the stock a Hold, mainly due to concerns about North Asia's continued weak performance, even after the release of the massive stimulus pack.
Small deep value individual investor, with a modest private investment portfolio, split approx. 50%-50% between shares and call options. I have a B.Sc. in aeronautical engineering and over 6 years of experience as an engineering consultant in the aerospace sector. The latter statement is not relevant in any way whatsoever to my investment style, but I thought to add it for self-indulgent purposes. I have a contrarian investment style, highly risky, and often dealing with illiquid options. How illiquid? Well, you can land a Jumbo on the spread and still have clearance for take-off. From time to time, I buy shares, mostly to not be categorized as a degen by my fellow investor friends, therefore the 50%-50% allocation. My timeframe tends to be between 3-24 months.I like stocks that have experienced a recent sell-off due to non-recurrent events, particularly when insiders are buying shares at the new lower price. This is how I often screen through thousands of stocks, mainly in the US, although I may own shares in banana republics. I use fundamental analysis to check the health of companies that pass through my screening process, their leverage, and then compare their financial ratios with the sector, and industry median and average. I also do professional background checks of each insider who purchased shares after the recent sell-off. I use technical analysis to optimize the entry and exit points of my positions. I mainly use multicolor lines for support and resistance levels on weekly charts. From time to time I draw trend lines, taken for granted, in multicolor patterns. Note: I tried to keep my introduction as real, and authentic as possible. I dislike empty suits, high-level BS, deep-level BS, unnecessary jargon, and self-indulgent, third-person written introductions with an air of superiority.Thanks for reading my introduction!
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