Is There Value in Cosmetics Stocks? Read and Find Out
The cosmetic industry includes companies that produce health and self care necessities such as makeup, shower and bath products, skincare, home care and even baby care. Most cosmetics companies are considered a part of the consumer staples market, and often they are involved in the production and distribution of their products worldwide. Trading CFDs on stocks of cosmetic companies is available on IQ Option and many traders choose them on a daily basis. Let’s explore the pros and cons of this industry and which stocks you can find on the platform.
What’s peculiar about the consumer staples market?
The definition of consumer staples is items that consumers are unwilling or unable to cut out of their budget, regardless of their financial situation. This includes food, beverages, hygiene and self care products, household goods as well as alcohol and tobacco. A benefit of this industry is that it is non-cyclical, which means that the goods are in demand all year round, without a strong connection to the season. Cosmetics and hygiene products are also in demand at a relatively constant level, which usually means a slow and steady growth for the companies.
In 2021, however, cosmetic stocks have underperformed the broader consumer staples market, which allows some traders to consider short selling the falling stocks and others — to consider buying the stocks at a lower cost. No matter which approach you prefer, you may find it interesting to learn about the 3 cosmetic stocks available on the IQ Option platform.
L’Oréal SA (OR)
This French personal care giant is the largest cosmetics company in the world. Concentrated on makeup, skincare, hair color and hair care, it owns a wide range of brands like L’Oreal Paris, Maybelline New York, Garnier, Lancome, Yves Saint Laurent, Giorgio Armani, Kiehl’s, Kerastase, La Roche-Posay and more.
The L’Oréal stock gained +16.58% YTD and though it is currently in a decline, things may change as the holiday season approaches. The trader’s sentiment for the asset looks like 50% buyers and 50% sellers right now, which means that traders need to conduct their own technical and fundamental research to decide on their approach. At the moment the stock is traded through CFDs at $364 on IQ Option.
Procter & Gamble Company (PG)
P&G is an American multinational consumer goods corporation. It’s revenue is estimated at 76.12B dollars and it offers a wide variety of hygiene and beauty products under such familiar brands as Pantene, Head & Shoulders, Herbal Essences, Olay, Old Spice, Safeguard, Secret, Braun, Gillette, Venus, Crest and many more.
Much like with L’Oréal, buyers and sellers on the platform are torn: 50% choose to buy the asset and another 50% thinks that it is a selling opportunity. It is worth mentioning, though, that the company managed to beat both EPS and revenue consensus estimates in fiscal Q4 2021 results. Despite the competition threats, the company holds a diverse enough portfolio of products, that involves Tide, Pampers and others. At the moment, PG stock is traded through CFDs at $139 on IQ Option.
Colgate-Palmolive Company (CL)
Colgate-Palmolive is responsible for around 43.8% of the worldwide toothpaste market. The company focuses on oral, personal and home care, as well as pet nutrition. It operates through such well-known brands as Colgate, Palmolive, Softsoap and Hill’s. P&G’s rival, it faces strong competition and pricing pressure from its competitors.
With a -11% YTD change, this stock may be considered as a short selling opportunity by many traders. Still, some analysts believe that due to Colgate-Palmolive’s restructuring plan that was initiated back in 2012, the company has a good chance to improve its stock performance. Currency CL is traded through CFDs at $74 on the IQ Option platform.
Which industry do you find most interesting from a trading point of view? Read our articles on the financial sector stocks and 5 stocks for food enthusiasts to learn more about the different sectors. Also, always keep in mind that past performance is not an indicator of future performance.
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
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Credit: Tatyana Scherbakova