COTY

Coty Inc

Consumer, Event Driven/Special Sit


Presented:10/01/2015
Price:$27.46
Cap:$10.14B
Current Price:$8.18
Cap:$7.10B

Presented

Date10/01/2015
Price$27.46
Market Cap$10.14B
Ent Value$14.20B
P/E Ratio42.91x
Book Value$2.69
Div Yield0.91%
Shares O/S369.40M
Ave Daily Vol1,672,418
Short Int1.37%

Current

Price$8.18
Market Cap$7.10B
Coty, Inc. manufactures and markets beauty products, fragrances, color cosmetics and skin care products. The company operates in three segments: Fragrances, Color Cosmetics and Skin & Body Care. The Fragrances segment provides a variety of men's and women's products. The brands in the Fragrances segment provides brands associated with fashion designers, Lifestyle brands and brands associated with entertainment personalities. The Color Cosmetics segment provides lip, eye, nail and facial color products. The Skin & Body Care brands include adidas, Lancaster, philosophy and TJoy. Coty was founded by Francois Coty in 1904 and is headquartered in New York, NY.

Publicly traded companies mentioned herein: Avon Products Inc (AVP), Coty Inc (COTY), Estee Lauder Cos Inc (EL), L’Oreal SA (OR FP), Procter & Gamble Co (PG)

Highlights

Following the announcement of the ~$12.5 billion purchase of 43 brands from Procter & Gamble (PG), the presenter is short shares of Coty (COTY) due to the structure of the deal [a Reverse Morris Trust (RMT), whereby PG will spin or split off the business, which will then merge with a COTY subsidiary] and a lofty valuation relative to higher quality peers. In addition, it seems likely that there will be an oversupply of stock following closure of the deal, and the presenter sees the risk/ reward as attractive with the stock trading in the high $20s,

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Idea Discussion

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