Opinions
Gordon Reid
Helen of Troy Ltd.
HELE-Q
TOP PICK
Jun 26, 2014
Stock price when the opinion was issued
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A developer and distributor of well-known products such as Revlon, Sunbeam, Vidal Sassoon, Dr. Scholl’s, etc. The company has done extremely well, but hit a bit of a hiccup in terms of growth in the last year or 2, but it appears that the growth has resumed. Trading at a mid-teens multiple, but have a very nice free cash flow yield of about 7.5%. This is a good time to buy.
vs. Church & Dwight They make household products like Arm & Hammer. They've grown organically half to 66% of their growth rate, and have made tuck-in acquisitions to boost that rate. Trades at a high-20s multiple which is too high for a consumer products company with their growth limited. Instead, look at Helen of Troy (HELE-Q) who distribute Revlon, Sunbeam and Dr. Scholl's and are trading at half the CHD multiple with the same growth rate.
They have two parts. Distribution of hair care items and a professional salon business. Also, do some home products. It is in his US small cap portfolio.