Tech talk: Avon Product, Inc.'s (NYSE: AVP) restructuring is paying-off, but the stock has run into technical resistance at/near $33, so I'm not recommending the purchase of additional shares at this time.

Those investors who purchased AVP when first recommended on May 6, 2009 at a price of $23.12 should hold their shares.

I guess Wall Street over did it a little bit, on the downside, with Tupperware earlier this year, driving shares down to about $11 in March. I caught the TUP train at $23.48 on April 28, 2009.

TUP is now at $38.10, good for a smooth 60% gain. And Tupperware's growth story remains intact: Tupperware will benefit from the U.S. 'frugal consumer' trend toward many, many more leftovers and fewer meals out. Hence, I'm Reiterating my Buy rating for Tupperware Brands Corporation (NYSE: TUP).

Hard Candy is coming to Wal-Mart Stores (NYSE: WMT), and I don't mean Jolly Ranchers. The high-end name in trendy cosmetics, famous for bringing unusual colors to ladies' palettes in the late 1990s, is now bringing a specially created line to the discount retailer.

Hard Candy products will hit shelves in 3,000 Wal-Mart stores next month, and will be available internationally by the spring. Products, from gold lipstick to bright green eyeliner, will range from $5 to $10 and target women between 18 and 35 (oooh! I'm just under the wire!).

Experience is rewarded ... but only if you can't see it.

A poll of 1,000 women this month revealed that 63% in the 18-34 age range and 73% in the 35-49 age range are perfectly fine with medical procedures intended to hide their ages.

Economy be damned, it seems, if you have dark circles under your eyes or a bit of extra flab built up around your chin.

Elizabeth Arden's (NASDAQ: RDEN) stock has been shellacked in the last couple of days, continuing a decline that began shortly after it reached a 52-week high of $21.79 in September 2008. RDEN has reached a nine-year low in price at $5.95.

The recent action in the stock should come as no surprise. With retail sales continuing to sour and mall traffic becoming more like Sunday services attendance on a beautiful summer day, it could hardly come as news that Elizabeth Arden would issue a negative earnings alert ahead of the company's second-quarter release of financial results scheduled for Friday.

Cosmetics and fragrances are some of the most discretionary of purchases with the widest range of price points. Consumers have the option of purchasing a less expensive brand or delaying the purchase until a better time. As a result, cosmetic products have reached a historically peak inventory level.

For Elizabeth Arden, those inventory numbers are further evidence of the earnings stress facing the company.

This post is part of a series featuring bargain stocks that are worth a look now. See more Cheap Stocks.

In addition to being a crackerjack equities analyst, I'm also something of a makeup aficionado. Credit my upbringing for this; my mother grew up in the '50s, and even today, she is loathe to so much as check the mail without a full application of liquid eyeliner. So, as you might imagine, I'm quite familiar with Estee Lauder Companies (NYSE: EL).

While it's technically a consumer-goods company, you might have a perception of Estee Lauder as a peddler of upscale cosmetics -- in today's economy, high-priced eyeshadow is unarguably a discretionary expense worth cutting. However, EL's reach is probably broader than you realize. For example, the company owns MAC, a line that caters specifically to professional makeup artists and amateur makeup fetishists. No matter the economic climates, these two constituencies can be counted on to keep shelling out for blush.

Estee Lauder also boasts the lower-priced Clinique line, a staple of many women's' skin-care and cosmetics routines for decades. On the high end, the company sells fragrances by the likes of Tom Ford and Michael Kors -- two names favored by the kind of consumers who do still have disposable income to spare. Plus, its Bumble and bumble brand name is a favorite of professional hair stylists.

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and a competitive advantage in established markets, preferably with a favorable global trend as a support. With this in mind, Avon is worth an evaluation.

For decades a door-to-door company, Avon (NYSE: AVP) has stepped into the globalization and digital ages, and the initial progress reports are positive.

Avon is the midst of a restructuring aimed at increasing efficiency and widening the company's sales venues. In its most recent quarter, Avon's North American region was a laggard, but its international business performed well, registering a 16% increase in sales, with double-digit gains from Central/Eastern Europe, and an impressive 29% rise in China. Further, in general, analysts were pleased with AVP's emerging market performance, citing brand building gains and an ability to attract much-sought, younger-adult women. As a result, AVP is on-track to meet analysts' 7-9% revenue gain for F2008.

Direct selling (5.3 million representatives) continues to be AVP's base, but catalogs, mall kiosks, a day spa, and a web site create a diverse retail presence.

All the while, Avon has also reduced its costs by initiating manufacturing operations in lower-cost regions of the world, and via sales force productivity increases. The company's expanded product base (cosmetics, fragrances, toiletries, jewelry, apparel, and home furnishings) is succeeding at widening its brand appeal across categories. The Reuters F2008/F2009 EPS consensus estimates for AVP are $2.16/$2.57.

Target Corp. (NYSE: TGT) is a retailer that's been known to find and feed customer niches better than any other discount retailer. From its bright store colors to trendy and chic items in several departments, the retailer has shown Wal-Mart Stores, Inc. (NYSE: WMT) that it can indeed compete. And, very well.

One of the more interesting product niches that's been explored recently has been higher-end women's cosmetics. When six beauty products rack up a retail bill of more than $200, you know there's something to be celebrated. No longer are Dillard's Inc. (NYSE: DDS) and Macy's Inc. (NYSE: M) the exclusive way many women buy those extremely lucrative cosmetic products with the hefty profit margins. Nope, Target's moving into the arena aggressively from all appearances.

Target is now stocking upper-end cosmetic brands like Clarins, Kiehl's, Origins, Bare Escentuals and Bumble and Bumble. Although the retailer's move was studied this past Tuesday, it certainly was no April Fool's joke. But do these brands care that the positioning Target will provide will undermine the premium brand luxury awareness and hefty prices at department store partners?

Many of these brands say they have no relationship with Target; therefore, Target's source may be the gray market. They are free to do that, but perhaps Target is just testing the waters of luxury cosmetics before making an official plunge in most of its national stores. Not so strangely, the experiment could easily work with Target's unique position in the market.

Forget about being in the beauty business. This overhaul at Avon Products, Inc. (NYSE: AVP) isn't going to be pretty in the least. As part of its previously announced restructuring plan, 2,400 jobs will be cut and the company plans to save about $430 million per year. The plan will cost $530 million, with $460 expensed through the end of 2007 and the remainder being charged between now and the end of 2009. Additionally, the company's going to write of $110 in inventory as it says it's simplifying product lines by getting rid of low selling products.

This turnaround plan for Avon was announced in November of 2005 and is focused on creating efficiencies in the operation, thereby cutting costs. They're also focusing on the "career opportunity" for representatives and they're trying to make it more attractive.

Avon is one of the oldest multi-level marketing (MLM) companies around. It was established in 1886, a time when door-to-door sales were a common way of purchasing items that were needed. Over time, the business model has evolved to more of home party model and one-on-one selling that doesn't necessarily involve knocking on stranger's doors.

Estee Lauder Companies Inc. (NYSE: EL) this morning reported Q1 profit that dropped to $0.20 per share compared to $0.27 in the same quarter a year ago, but the company doubled analysts' expectations of just $0.10 per share. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on EL.

After hitting a one-year high of $52.31 in April, the stock fell to a 52-week low of $38.41 in August. EL opened this morning at $45.00. So far today the stock has hit a low of $44.95 and a high of $47.05. As of 10:40, EL is trading at $45.64, up $2.32 (5.4%). The chart for EL looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $40 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in just 3 months as long as EL is above $40 at January expiration. Estee Lauder would have to fall by more than 12% before we would start to lose money. Learn more about this type of trade here.

Revlon (NYSE: REV) is changing hands at $1.15 in early trading. That's up 10%.

The big rise does not keep the cosmetics company from being one of the most mismanaged public companies going.

In the quarter, revenue grew to $349.2 million from $321.1 million. The company's net loss was $11.3 million, or $0.02 per diluted share, compared to a net loss of $87.1 million, or $0.20 per diluted share.

All of the earnings figures were the good news. The company quoted ACNielsen statistics to show that it market share was down across most of its brands.

Because the company did a bit better than expected, its share are getting a bit of a goose.

Over the last five years, Revlon's share price is down 70%. The shareholders are probably out of sorts, but let them eat lipstick.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Under activist CEO Andrea Jung, Avon Products Inc. (NYSE: AVP) has turned itself around and is posting excellent numbers across the board and around the world. Investors interested in international stocks should still take a look at Avon which, despite being an American company, now earns slightly more than half its revenues from markets abroad. The stock opened the year trading at $33.60 and closed July 12 at $39.55, up 19% thus far this year. Not only do 2007 numbers look good compared to 2006, which was admittedly horrible, but as the reorganization efforts continue to gain traction worldwide, the numbers will only get better.

Here follows a summary of Avon's recent earnings report:

1Q 2007 total revenue grew 9% to $2.2 billion, with all 6 global divisions posting profits. Net income for 1Q TRIPLED to $150 million. The number of Avon representatives rose 4% to more than five million, making Avon the world's largest direct seller. Avon is spending $15 million to provide leadership and sales training for this potent sales channel. Operating profit rose 176%, (not a typo!) to $238 million despite continuing restructuring costs of $27 million. Thus far, FY 2007 cash flow is ahead of FY 2006 cash flow and the company repurchased $130 million of its stock during 1Q 2007. FY 2006 was marked by huge restructuring costs inlcuding inventory write offs and numerous products lines being discontinued. Most of the mess is behind Avon, a fact demonstrated by around the world increases in both revenues and profits.

Yesterday I wrote an earnings preview for this morning's financial results from Revlon Inc (NYSE: REV). The numbers came in very nicely for the stock today.

Going into today's first quarter announcement, analysts had been expecting to see the company show a quarterly loss of 7 cents per share -- what Revlon wound up with. This is exactly the sort of news the cosmetic giant has been needing lately, and Wall Street is definitely rewarding it in early morning trading. With a little over an hour to go before today's opening bell, the stock has been pushed up 8.4% by pre-market traders.

While we never like to see a company show a loss, Revlon has been in the middle of a restructuring program that does seem to be having a positive effect, and that is what is really going to give traders a reason to buy up the stock today. The company was able to lower its overall costs during the quarter while at the same time increase its overall sales. Compared to the first quarter last year when Revlon showed a loss of $58.2 million, this current quarters loss of $35.2 million is a nice improvement.

Avon Products (NYSE:AVP), famous for its army of 5 million sales representatives selling cosmetics door-to-door, is embarking on a new ad campaign to attract new representatives. To see one version of the commercial, which is on YouTube for some bizarre reason, click here. Avon is increasing its advertising budget 36% in 2007, to $340 million. In 2005, the company spent just $135 million.

The campaign's "Hello Tomorrow" theme will attempt to bolster the company's image, which some believe has floundered as the products are not considered cool by young people. Will it work? I hardly consider myself a cosmetics expert, but I'll be surprised if it does. Avon is a household name, and the marketing that has made it such an iconic brand has also given it a certain stigma: It's seen as corny by most people in my age group. I'll give CEO Andrea Jung mad props if she succeeds in making Avon hip to a new generation but I'll also be surprised. Avon has a strong core audience, but I have doubts about its ability to attract new customers. What do you think?

Back on October 23, 2006 investment guru Jim Cramer came out strongly against Bare Escentuals (NASDAQ: (GS) BARE). I pitted my opinion against Cramers and "let it ride". I've just finished doing a cursory check on Bare Escentuals to see how they have fared. Suffice it to say, I hope no one sold their BARE shares based on Cramers advice.

The chart attached herein shall provide the whole story. My words are really not needed. Besides, I'm just a dude living up here in the woods and making cabinet panels for a living. What could I possibly know about investing? Bare Escentuals just went public in September of this year. Their performance thus far appears healthy to me.

The two stocks that Cramer liked in place of Bare Escentuals were Allergan (NYSE: AGN) and Medicis Pharmaceutical (NYSE: MRX). I will concede to Cramer that those two stocks have moved upward also. My point here is small and simple: You don't need a television crew and a stable of financial analysts to pick a winner now and then. If you have good instincts and the willingness to do your own research, you too can pick some stocks which will pay you to own. To quote my bald headed nemesis: "Do your homework."

(Image courtesy of Norton Sales)