Though they're frowned upon by serious investors, theme portfolios tend to work better than much of the stuff produced by the financial services industry. It seems the number of lip care products sold today is astronomical, and thus was born the "lip balm portfolio". The list of six stocks and two ETFs provides investors with a remarkably diversified portfolio, not to mention properly moisturized lips.
IN PICTURES: 5 Tips To Reading The Balance Sheet

Brand Company YTD Return
Chapstick Pfizer (NYSE:PFE) -2.6%
Vaseline Unilever Plc (NYSE:UL) -5.8%
Alba Botanica Hain Celestial Group (Nasdaq:HAIN) 41.1%
Burt\'s Bees Clorox (NYSE:CLX) 12.4%
C.O. Bigelow Limited Brands (NYSE:LTD) 46.9%
Neutrogena Johnson & Johnson (NYSE:JNJ) -1.7%
Labello Beiersdorf AG / iShares S&P Europe 350 Index (NYSE:IEV) 0.4%
Soft Lips Rohto Pharmaceutical / iShares MSCI Japan Small Cap Index (NYSE:SCJ) 7.1%

Chapstick Vs. Blistex
Finding readily available information about the lip care industry isn't an easy task. In 1998, the U.S. market was approximately $260 million and by 2005, that number was $538 million. Chapstick and Blistex accounted for 50% of U.S. market share in 1998. And according to Wyeth's 2008 10-K, Chapstick's revenue was $137.6 million. In 2009, Pfizer acquired Wyeth. Its consumer healthcare revenue (Chapstick, Advil, Preparation H) in 2009 was $494 million, so it's safe to assume that Chapstick's sales were about the same as 2008. Blistex is a private company but its revenue would likely be about the same. It is still the biggest player in non-medicated lip balm.

Vaseline's Long History
Robert Chesebrough created Vaseline in 1870 after experimenting with rod wax extracted from an oil well in Pennsylvania. By 1911, it had factories in the U.S., Canada, Europe and Africa. In 1955, the Chesebrough Manufacturing Company merged with Pond's Extract Company to form Chesebrough-Ponds, which was acquired by Unilever in 1987 for $3.1 billion. Eleven of Unilever's brands had global revenues of $1 billion in 2009. Although Vaseline isn't one of them, it's an important part of Unilever's personal care products, which generated 30% of the company's $39.8 billion in total revenue. (For related reading, see 50 Years Of Consumer Spending.)

Other Brands (Nasdaq:AMZN) sells 3,963 lip balm products, providing online shoppers with a cornucopia of brands both large and small. In addition to Chapstick, Blistex and Vaseline, there is Alba Botanica (owned by Hain Celestial), Burt's Bees (Clorox), C.O. Bigelow (Bath and Body Works/Limited Brands), Neutrogena (Johnson & Johnson), Labello (Beiersdorf AG) and Soft Lips (Mentholatum Company/Rohto Pharmaceutical). Despite the lip care market having revenues of less than a billion dollars in the U.S., it's remarkably competitive, especially when you consider Chapstick and Blistex account for almost half the amount.

The Bottom Line
Year-to-date, the lip balm portfolio is up 12.2%, 780 basis points better than the S&P 500. Though it's a complete portfolio, there are still some companies that were left off of the list, which leaves room for modification. Also, the medicated lip balm market, which treats cold sores and cankers, was not included. This would add several pharmaceutical companies; the choice is yours. (For more, see A Guide To Investing In Consumer Staples.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Investing News

    Should You Be Betting with Buffett Right Now?

    Following Warren Buffett's stock picks has historically been a good strategy. Is considering his biggest holdings in 2016 a good idea?
  2. Products and Investments

    Cash vs. Stocks: How to Decide Which is Best

    Is it better to keep your money in cash or is a down market a good time to buy stocks at a lower cost?
  3. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  4. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  5. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
  6. Investing

    Don't Freak Out Over Black Swans; Be Prepared

    Could 2016 be a big year for black swans? Who knows? Here's what black swans are, how they can devastate the unprepared, and how the prepared can emerge unscathed.
  7. Investing News

    Today's Sell-off: Are We in a Margin Liquidation?

    If we're in market liquidation, is it good news or bad news? That party depends on your timeframe.
  8. Investing News

    Bank Stocks: Time to Buy or Avoid? (WFC, JPM, C)

    Bank stocks have been pounded. Is this the right time to buy or should they be avoided?
  9. Stock Analysis

    Why the Bullish Are Turning Bearish

    Banks are reducing their targets for the S&P 500 for 2016. Here's why.
  10. Stock Analysis

    How to Find Quality Stocks Amid the Wreckage

    Finding companies with good earnings and hitting on all cylinders in this environment, although possible, is not easy.
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  3. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  4. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  5. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  6. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
Trading Center