Our financial investment expert Anne Ashworth makes YOU cash by searching the stock exchange for the best funds and shares. She reveals how you can cash in on cosmetics ...

Looking great can be pricey. Lotions, potions, cosmetics and creams: they are all costly. But for investors, they can also be extremely successful.

The target of one of this summertime's most talked-about takeover offers is a cosmetics company developed simply three years back by an American design who's married to a pop idol.

This company's products, a huge success among Gen Z, consist of a 'glazed-doughnut impact' lip treatment.

The $6.41 bn e.l.f. Beauty group, commemorated for its discount rate 'dupe' - or copycat - creams and comprise, is paying $1bn in shares and cash for Rhode, a beauty business 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 followers, an essential in an industry being interrupted by social media. She is the spouse of vocalist Justin and daughter of star Stephen Baldwin, brother of Alec.

The excitement around the offer suggests that, if your portfolio needs a glow-up, perhaps you ought to look to the global appeal business, whose sales are forecast to reach $600bn by 2028.

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

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

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

Gerrit Smit of fund manager Stonehage Fleming thinks the human urge to look much better will constantly be with us - and for that reason assures returns for financiers.

'Beauty is a sector with indefinite sustainable development, as the desire for beauty is a forever aspect. Everyone is getting older and want to look good doing so.'

Smit highlights the sector's innovation, with its focus on evolving creams and cosmetics for various markets, ranging from 'tweens', the 13-year-olds with intricate skin cleansing programs, to older females combating the consequences 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 also allow e.l.f. (the name represents eyes, lips, face) to diversify its supply chain. The business, which makes 75pc of its varieties in China, is currently subject to 30pc tariffs in the US, and has already been required to raise rates.

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

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

The slower development highlights the market's various obstacles - such as Chinese consumers' hesitation to spend.

This disinclination to splash the money has actually hit the shares of the charm power homes: 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, partially due to management and other problems - however likewise due to the fact that 26pc of its earnings originate from China.

Other forces are likewise bringing modification, as Will McIntosh Whyte, fund manager at Rathbones, explains: 'Brand commitment is on the decrease, since social media allows start-up brands to reach large audiences and grow rapidly.'

But e.l.f.'s relocate to purchase Rhode could suggest self-confidence is returning and there is an opportunity for investors to profit.

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

Michael Burry, the hedge fund supervisor whose bet in 2008 on mortgage-backed securities was illustrated in the movie 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 understands if Burry is a routine user of Estee Lauder Advanced Night Repair Serum? But there can be some benefit to dedicating some of your financial investment spending plan to the business that make the important things you like. This familiarity offers 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 service, is the titan of the market. The founding 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 pricey 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 on intense research: it spends about EUR1bn a year. Its gross revenue margins can be as high as 70pc on some items; it also has prices power.'

Smit likewise likes the company's motto: 'We do just charm but all of beauty.'

McIntosh Whyte regards L'Oreal as 'the quality play' in the sector due to the fact that of its early recognition of social media's significance.

He adds: 'L'Oreal is proficient at getting brands popular with younger customers such as the skin care brand names Dr G and Youth To Individuals. The company uses its scale to turn these brand names from specific niche players into worldwide names.'

L'Oreal shares have increased by 15pc over the previous 6 months to EUR384. Estee Lauder shares started to surge a month earlier, spurred by hopes that the $20bn group can stage a turn-around. For the minute, analysts 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 earlier. The view seems to be that, although other star appeal brands are for sale, Rhode is the most appealing.

Investment expert (and cosmetics enthusiast) Anne Ashworth states 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 prevented by the so-so experience of Coty's investment in two Kardashian brands. Coty retains a 51pc slice of Kylie Beauty, the Kylie Jenner brand name, however her sis Kim Kardashian has actually redeemed her company.

Coty shares are 81pc lower than a years back, and 34pc down over the past 6 months at $5. But analysts appear to reckon that Coty ought to benefit from the upturn in the sector and advise that the shares deserve holding.

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

Ulta's president Kecia Steelman, summarized the mood that is stimulating the recovery: 'Many consumers show that they are leaning into charm as a comfort and escape from the stress of macro unpredictability.'

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Shares in Shiseido, the Japanese group, are 65pc down over 5 years at 2,441 yen. Nevertheless, analysts think about Shiseido to be a 'hold' evidently hoping the business is addressing problems such as bad performance of its whimsical Drunk Elephant skin care brand name.

For a while, Drunk Elephant was a favourite among teens. But these are fickle customers, and there was some controversy as to whether this age requires potions to take on wrinkles. The London activist financier Independent Franchise Partners has a holding in Shiseido which must add to pressure for modification.

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

One analyst anticipates a rise to EUR30 - which would be great news for Charlotte Tilbury, the creator of the eponymous brand name. She maintains a minority shareholding in her creation until Puig presumes complete ownership in 2031.

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

On the basis that many will choose an inexpensive reward, shares in the W7 business - the ₤ 388m Warpaint London - look attractive buy at 455p. Analysts have actually set a typical target price of 666p.

As an unashamed enthusiast of creams, cosmetics and fragrance - I have drawers loaded with the things - I am going to take a bet on a spread of appeal 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 put on your eyes, your lips and your face?