Even with a miss, market finds Avon (AVP) beautiful

Even though there was a miss, I can see why the market isn't so keen to sell. Avon kept costs and expenses in check during the quarter. The operating profit margin saw an increase. Cash from operations jumped 27% for the full year.

And there was news of a dividend increase of 5%. Although that's a small rise in the payout, it certainly differentiates the company from the financial mess out there, doesn't it? I even think Avon could have afforded to raise its dividend a little higher, but I guess the concept of being conservative is kind of relevant during these difficult times. In fact, management chose not to buy as many shares back this year ($172 million was spent for repurchasing activities in 2008 versus $667 million in the previous year). Avon seems to be doing well managing the bottom line, but the problem going forward is the changes that are happening in terms of currencies. This is an issue that has been dogging some earnings reports as of late. Like the press release indicates, all the company can do is keep up cost control and grow the business as efficiently as possible.

I thought it was a good report. I enjoyed the numbers. Steven Halpern recently highlighted some positive commentary on Avon and its long-term prospects. I can see the case. However, I don't see any reason to chase the stock today. Wait for it to come back down to earth. There's still too much excitement in it as I finish up this piece. After Avon pulls back, I'd have to assume that, at the stock's current yield, it'll make a decent long-term bet. Shorter term, however, might put pressure on the shares; of course, I say that in the context of being a bear on the whole market in general.

Disclosure: I don't own any company mentioned; positions can change without notice.