The health and beauty industry was recently put under the spotlight and not for particularly flattering reasons. One of the most recognized names within the sector, Avon Products, Inc. (NYSE:AVP), was the unwitting subject of a fake buy-out bid from a fictional entity called "PTG Capital." Because the bid was able to traverse official channels, this was a major embarrassment for the Securities and Exchange Commission. In addition, the Federal Bureau of Investigation was brought in to look into the undoubtedly thorny circumstances.

But for those investors who may be tempted to feel sorry for Avon Products, don't. The demise of the former cosmetics giant was telegraphed to all but their management team, which insisted that chief executive Sherilyn S. McCoy, who was elected to the highest post in April of 2012, could turn the ship around. For quite some time, McCoy did manage to significantly add market value, reversing a painfully acute downward slide. But by October of 2013, the jig was up. The markets punished Avon stock and the situation has yet to abate.

Poor Business Structure

It's not necessarily that Avon is a fundamentally poor company; rather, they're a company in a fundamentally poor business structure. The "door-to-door" direct sales model is an antiquity like steam-engine cars or racial segregation. There were historical reasons for its implementation but in modernity, such models are out of touch with reality.

Estee Lauder Companies Inc. (NYSE:EL) would be Avon's exact antithesis. Rather than hawking mediocre-quality cosmetics to housewives, Estee Lauder representatives realize that the demand will come to them. Leveraging a market capitalization of $33.15 billion -- more than 1000% higher than Avon -- their clout in the cosmetics industry is enormous.Buy This, Not That Cosmetics Industry

Estee Lauder's technical performance is equally impressive, with their stock continuing to move higher and higher since the onset of the global financial crisis of 2008 and 2009. There's also nothing to suggest that the momentum will fade in a dramatic manner. Over the long-term, the stock exhibits a "step-up" pattern, moving in leaps and bounds before entering a consolidation phase. Upon exiting the consolidation, EL stock continues on its next upward journey. In such circumstances, the old adage applies: the trend is your friend, until it ends.

The one "advantage" that Avon has over Estee Lauder is its significantly cheaper per-share price, which allows an investor to carry far more leverage with lower upfront capital. However, investors pay for that leverage with beta, or the widely-accepted barometer for a stock's implied volatility. In this regard, Avon's beta is 110% greater than Estee Lauder's, and for good reason.

Look where Estee Lauder is, and compare that to Avon.