Our investment expert Anne Ashworth makes YOU money by scouring the stock market for the very best funds and shares. She reveals how you can capitalize cosmetics ...

Looking good can be costly. Lotions, potions, makeup and creams: they are all pricey. But for investors, they can likewise be extremely profitable.

The target of one of this summertime's most talked-about takeover offers is a cosmetics company developed just 3 years earlier by an American design who's wed to a pop idol.

This company's products, a huge success amongst Gen Z, include a 'glazed-doughnut result' lip treatment.

The $6.41 bn e.l.f. Beauty group, commemorated for its discount 'dupe' - or copycat - creams and make up, is paying $1bn in shares and money for Rhode, a charm company whose sales in the year to March were $212m.

Rhode is led by Hailey Rhode Bieber, a business owner and influencer with 55.1 m Instagram fans, an essential in an industry being interfered with by social networks. She is the better half of singer Justin and child of actor Stephen Baldwin, sibling of Alec.

The enjoyment around the deal recommends that, if your portfolio needs a glow-up, possibly you need to aim to the international charm organization, whose sales are forecast to reach $600bn by 2028.

Rhode, a charm company owned by model Hailey Bieber, is being gotten by e.l.f. Beauty (below) for $1bn

New research from Barclays shows that the 'lipstick index', still applies.

Under this theory, in tough times females will continue to treat themselves to a little indulgence such as a lipstick - or these days, a peptide lip treatment.

Gerrit Smit of fund supervisor Stonehage Fleming believes the human desire to look much better will always be with us - and therefore promises returns for investors.

'Beauty is a sector with indefinite sustainable growth, as the desire for appeal is a forever aspect. Everyone is growing older and want to look excellent doing so.'

Smit highlights the sector's development, with its concentrate on evolving creams and cosmetics for various markets, ranging from 'tweens', the 13-year-olds with complex skin cleaning programs, to older women combating the repercussions of ageing.

Such was the excitement about Rhode's prospective to attract any ages that there was a 24pc bounce in it shares.

The purchase of Rhode will likewise enable e.l.f. (the name means eyes, lips, face) to diversify its supply chain. The business, that makes 75pc of its ranges in China, is presently based on 30pc tariffs in the US, and has actually currently been required to raise prices.

News of the Rhode acquisition was accompanied by the statement of 28pc increase in e.l.f.'s sales for 2025 to $1.3 bn. This sounds like an impressive rise. But sales leapt by 77pc in 2024.

Ms Bieber and e.l.f. Beauty chairman and CEO Tarang Amin

The slower growth highlights the industry's various obstacles - such as Chinese consumers' reluctance to spend.

This disinclination to sprinkle the cash has hit the shares of the beauty power houses: Coty, Estee Lauder, L'Oreal, Shiseido and Puig, the Spanish owner of Charlotte Tilbury.

Estee Lauder shares reached $365 in December 2021. They are now pull back at $68, partly due to management and other issues - but also since 26pc of its incomes come from China.

Other forces are also bringing modification, as Will McIntosh Whyte, fund manager at Rathbones, explains: 'Brand commitment is on the decline, since social networks enables start-up brands to reach large audiences and grow quickly.'

But e.l.f.'s relocation to purchase Rhode might suggest self-confidence is returning and there is a chance for investors to profit.

A minimum of one prominent and hard-headed US financier appears persuaded this the case.

Michael Burry, the hedge fund supervisor whose bet in 2008 on mortgage-backed securities was depicted in the film The Big Short, is backing revival at Estee Lauder.

His Scion Asset Management fund now holds a $13.3 m stake in Estee Lauder, owner of brand names like Bobbi Brown, Clinique, Jo Malone London and Le Labo.

Who knows if Burry is a regular user of Estee Lauder Advanced Night Repair Serum? But there can be some advantage to devoting a few of your investment budget to the companies that make the things you love. This familiarity gives you additional insight. Here are your alternatives.

THE BEAUTY PARADE

Among L'Oreal brand names are CeraVe, Garnier, Maybelline and the more upmarket Aesop and Lancome

L'Oreal, a EUR200bn Paris-based business, is the titan of the industry. The starting household, the Bettencourt Meyers dynasty, have a 35pc stake.

Among L'Oreal brands are CeraVe, Garnier, Maybelline and the more upmarket Aesop and Lancome. Demand for these expensive lines assisted first-quarter sales to rise by 3.5 pc to EUR11.73 bn.

Smit lists L'Oreal's strengths. 'Its success is based upon extreme research study: it spends about EUR1bn a year. Its gross profit margins can be as high as 70pc on some items; it likewise has prices power.'

Smit also likes the company's slogan: 'We do only charm but all of beauty.'

McIntosh Whyte concerns L'Oreal as 'the quality play' in the sector due to the fact that of its early acknowledgment of social media's value.

He includes: 'L'Oreal is skilled at acquiring brands popular with more youthful consumers such as the skincare brands Dr G and Youth To Individuals. The business utilizes its scale to turn these brand names from niche gamers into global names.'

L'Oreal shares have actually increased by 15pc over the previous 6 months to EUR384. Estee Lauder shares began to rise a month ago, stimulated by hopes that the $20bn group can stage a turn-around. For the minute, experts rank the shares a hold.

E.l.f., by contrast, is rated a 'buy', although the shares are 564pc above their level of 5 years back. The view appears to be that, although other celeb beauty brand names are for sale, Rhode is the most promising.

Investment guru (and cosmetics fan) Anne Ashworth says she'll be investing - on the basis that it can pay to put your money where your mouth is

E.l.f. does not seem dissuaded by the so-so experience of Coty's financial investment in 2 Kardashian brands. Coty maintains a 51pc piece of Kylie Beauty, the Kylie Jenner brand name, however her sis Kim Kardashian has actually purchased back her company.

Coty shares are 81pc lower than a decade earlier, and 34pc down over the previous 6 months at $5. But experts appear to reckon that Coty should gain from the upturn in the sector and advise that the shares deserve holding.

Most experts likewise consider shares in Ulta Beauty to be a 'hold', although this chain of American appeal stores and hair salons reported better-than-expected first quarter sales late last month, triggering an 18pc bounce in the shares to $467.

Ulta's chief executive Kecia Steelman, summarized the state of mind that is sparking the recovery: 'Many consumers indicate that they are leaning into beauty as a convenience and escape from the tension of macro unpredictability.'

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Shares in Shiseido, the Japanese group, are 65pc down over five years at 2,441 yen. Nevertheless, experts consider Shiseido to be a 'hold' evidently hoping the business is dealing with problems such as poor performance of its whimsical Drunk Elephant skin care brand.

For a while, Drunk Elephant was a preferred amongst teenagers. But these are fickle consumers, and there was some debate regarding whether this age requires potions to deal with wrinkles. The London activist investor Independent Franchise Partners has a holding in Shiseido which ought to contribute to push for change.

More optimism surrounds the Spanish group Puig which is seen as 'buy' on the basis of more demand for its Paco Rabanne and other fragrances. The shares stand at EUR17.

One expert forecasts an increase to EUR30 - which would be excellent news for Charlotte Tilbury, the creator of the eponymous brand name. She maintains a minority shareholding in her production until Puig assumes full ownership in 2031.

A tube of Charlotte Tilbury's bestselling Pillow Talk lipstick expenses ₤ 29. A tube of W7 Naked Desire lipstick (in a comparable gold-fluted housing) is ₤ 4.

On the basis that many will prefer an inexpensive reward, shares in the W7 business - the ₤ 388m Warpaint London - look appealing buy at 455p. Analysts have actually set an average target rate of 666p.

As an unashamed fan of creams, make-up and fragrance - I have drawers filled with the stuff - I am going to take a bet on a spread of beauty stocks.

I will be investing on the basis that it can pay to put your cash where your mouth is. Or should that be what you place on your eyes, your lips and your face?