Revlon Inc (REV): This Cosmetics Business is Cheap With High Insider Ownership

Coty Inc (NYSE:COTY), with the financing support from Berkshire Hathaway, once placed a $10.7 billion bid for Avon Products, Inc. (NYSE:AVP) to expand its footprint in the international market, along with its increasing presence in several emerging markets such as Brazil and China. Moreover, Coty Inc (NYSE:COTY) hopes to take advantage of R&D and distribution capabilities of Avon Products, Inc. (NYSE:AVP). Nevertheless, Coty withdrew the offer due to Avon’s no response. In the next 2-4 years, Avon Products, Inc. (NYSE:AVP) could earn around $1.50-$1.75 per share, thanks to the ongoing cost-cutting program under the leadership of the new CEO Sheri McCoy. Among the three companies, only Avon Products, Inc. (NYSE:AVP) pays dividend with the yield at 1%. Neither Coty Inc (NYSE:COTY) nor Revlon Inc (NYSE:REV) offer investors dividends.

My Foolish take

Indeed, Revlon could be a good buy for investors at its current trading price due to its great global franchise, relatively low valuation compared to its peers and high insider ownership. If Revlon Inc (NYSE:REV) is valued at the EBITDA multiple of 12, it could be worth around $26 per share. According to Barron’s, Chris Mittleman, Mittleman Brothers’ chief investment officer, estimated that Revlon could be worth $30 per share, or $40 per share in a buyout deal.

The article This Cosmetics Business is Cheap With High Insider Ownership originally appeared on Fool.com.

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