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Mish Schneider Why cosmetics could see a boost as mask mandates ease

The Center for Disease Control (CDC) in the U.S. has lifted mask-wearing mandates for vaccinated people in many outdoor spaces. Additionally, quite a number of commercial businesses have followed in kind, exempting vaccinated individuals from wearing a mask indoors.

The CDC states that, since vaccines offer a high level of protection, the risk of getting or spreading the disease if one is vaccinated is low. “By June, nobody is going to be wearing masks. By June, I think, the prevalence [of COVID] is going to be sufficiently low in this country [and] we’re just not going to be concerned about it,” the former Food and Drug Administration commissioner said on CNBC’s “Squawk Box.”

By June ... we're just not going to be concerned about [COVID]" - former FDA commissioner

This is where many of us do get concerned. Oh no, not about getting or spreading the virus. We are concerned because after nearly a year and a half of wearing a mask, taking it off changes a lot of things.

I do not know about you all, but speaking for myself, mask wearing was both a curse and a liberation. The curse was in remembering to always have one at my disposal. The curse was in the limited breathing capability. The curse was in having to wash the mask after every use. The curse was in choosing between a medical paper mask, colour matching the mask to your wardrobe or just always going with basic black.

The curse was in not recognising acquaintances right away. The curse was in muffled sounds hard to hear, especially when talking across food counters and at supermarkets. The curse was in spooking my friends’ dogs and children. The curse was in wearing sunglasses and having them fog up from my own breath. The curse was in putting it on after eating garlic.  Some say the curse was in developing “maskne” or acne-like breakouts. Happily, I can report the last one never happened to me!

So, now that we, the dearly vaccinated, can tear off that mask, the liberation that mandate brings to us is evident. However, with every liberation comes a caveat. Sure, we are liberated now and can recognise friends, breathe better, eliminate one accessory, launder less, enjoy dogs and children again, eat garlic only once and watch our maskne clear up.

But wait! After a year and a half year of foregoing sun protection, moisturiser, wearing little to no makeup and no lipstick, the to-do list before entering the public shifts once again.

That got me thinking. Facial products, makeup, and sun protection — all this adds up to stock picking opportunities, and so I checked several cosmetic companies that could benefit greatly over the remainder of 2021.

"Facial products, makeup, and sun protection — all this adds up to stock picking opportunities"

I highlight four.

First, Nu Skin Enterprises [NUS]. As a multi-level marketing company, the opportunity for reps to work from home attracted many during the pandemic. At their highest point, they traded for circa $137 per share, but now trade for circa $59 per share. A move over $60 could take this higher, with a risk under $55.

Next is Revlon [REV]. Around since 1932, the company has multiple divisions that focus on separate markets. These divisions include their name brand, Elizabeth Arden, Inc., Ultima II, and the Britney Spears Fragrance. The stock made a new all-time low in 2020. Since then, it has tripled in price, yet still sits near its historical lows. A move over $11.75-$12.00 looks good for the possibility of seeing a run back up near $20 at least.

Then there is Estee Lauder [EL]. A multinational manufacturer and marketer of prestige skincare and other cosmetics products, their portfolio contains over 20 well-known brands including Clinique, MAC Cosmetics, La Mer, Tom Ford Beauty, and more. In April, EL made a new all-time high and now trades approximately $30 lower. A move back over $305 could take this to yet another new all-time high.

Finally, there is Helen of Troy LTD [HELE]. Products under the company’s beauty segment include hair & skincare products, grooming tools, fragrances, deodorants, and more. Helen of Troy hit all-time highs in January 2021. If the price holds over $214, HELE could run beyond $230 and back up to new highs — and maybe even further.

Perhaps the best reason of all to check out these companies that we expect could prosper as more and more rush out to buy fresh makeup, is because of a recent survey done at the Temple University's College of Public Health and the Center for Human Appearance at the University of Pennsylvania's Perelman School of Medicine.

Photographs of 60 faces with and without surgical-style masks were rated on attractiveness. The study used a racially diverse set of male and female faces. The faces, first without masks, were categorised as “unattractive,” “average” or “attractive” based on their average ratings. With surgical masks digitally added, attractiveness ratings of the faces improved significantly for both women and men. Faces in the “unattractive” group saw the greatest improvement in average rating with masks on, with approximately 42 percent increases in ratings for women and for men.

42%

Increases in ratings with mask on picture

If that does not make the case for a makeover, then perhaps you should leave your mask on! Either way, the cosmetics investment field could be one to explore further.

 

This article was written for Opto by Michele ‘Mish’ Schneider, director of trading and education and MarketGauge.com. You can follow her on Twitter @marketminute, and on Instagram @mishschneider

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