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Fast Picks is a site specialized the selection of solid Internet companies with high upside potential
Our pick for this month is Allou Beauty & Health (Amex: ALU), Allo distributes national brand name health and beauty aid products, fragrances and cosmetics, non-perishable packaged food items and prescription pharmaceuticals to retailers in NY, NJ, CT, PA and FL. For the six months ended 9/98, revenues rose 7% to $158.3 million. Net income fell 58% to $934 thousand. Revenues reflect an expanded customer base and increased same store sales. Earnings were offset by higher S/G/A expenses and increased borrowings.
This company has been profitable for the last nine years, Allou has a high bookvalue of $11.6, Revenues of $311 million and a tight float of 2.2 million shares plus a low P/E of 17. The overall market cap is about 45 million. You might as well notice that the company net income has decreased by 58% for the last 6 months, the decrease in net income is connected to Allou exciting Internet involvement. Allou operates an Internet E-Commerce site titled The Fragrance Counter (Fragrancecounter.com), as well as The Cosmetics Counter (cosmeticscounter.com). Allou has entered recently in exclusive marketing agreements with all major portals online covering about 90% of the web population, its partners include AOL, MSN, YAHOO, EXCITE and LYCOS. These agreements provided a %450 growth for its online business compared to a year ago. according to Cyber Dog the online research firm: Perfumes and cosmetics is the fastest growing sector in E-Commerce with sales projected to reach 340 million by the year 2002 .
What is Allou Health and Beauty upside potential?
It is a fact that almost all of the perfumes and cosmetics industry regesiter 50% of their sales during the Christmas quarter and Allou being a wholesaler and a net distributer is positioned to benefit greatly from this jump in online commerce and the booming Christmas sales. The company has acquired during this year Direct Fragrances aFragrances Telemarketr with over 5000 retailer that will contribute significantly to Allou revenues this quarter.
Nevertheless all what is described above is only one chapter of our excitement about Allou, Eli Katz Fragrance Counter CFO has announced this October to CBSMarketWatch that the company is looking for ways to finance the operations of its Internet business, the financing opetions ranges from venture funds to an IPO of its online operations. As you may have seen recently the Internet IPO market is extremely HOT!, companies like Creative Computers (MALL), Navarre (NAVR) and Ziff Davis (ZD) and many others had substantial appreciation in stock price due to the spin off of their online operations. keep in mind that Allou has only a tight float and a small market cap, the run up in Allou could outrun all the others and most likely to double its current stock price.
For more info please visit:
Yahoo Finance:
http://biz.yahoo.com/p/a/alu.html
Look Ahead Charts:
http://www.adtrader.com/finserve.asp?sn=842&title=Free+Look+Ahead+Charts&sym=ALU
Fragrance Counter:
Fast Picks does not accept any compensation from companies which are or have been reviewed here. Investing is a risk and anyone interested in this or any other stock should speak to a qualified investment professional before making any decisions. We may buy or sell our recommendations at any time (this means that we will be buying before you and most likely selling before you). Past performance is no guarantee of future results.