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This sexy stock crowned as the beauty queen winner

Battle of beauty in cosmetics space

Jim Cramer has taken on the battle of beauty, with two cosmetic companies on different sides of the spectrum. One is a glamour goddess with a beautiful stock that could keep running higher, and the other as the ugly stepsister that Cramer wouldn't dare invest in.

The "Mad Money" host compared the best-of-breed stock Estée Lauder and worst-of-breed Avon. In his long tenure of investing, Cramer knows that it all comes down to CEO execution.

Estée Lauder's CEO Fabrizio Freda has taken the stock 19 percent in the past year alone, not to mention 174 percent in the past five years. Avon's CEO Sherilyn McCoy certainly cannot compare to that, as the stock has pummeled 44 percent in the last 12 months.

"And you know what? I think Estée Lauder is still a buy up here at these levels, while Avon is a value trap that I wouldn't touch with a 10-foot pole," Cramer added.

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And while Cramer thinks the horrendous performance is not completely attributed to McCoy, since she was left with quite a mess to clean up from the last CEO, Andrea Jung. He still thinks McCoy has fallen asleep at the wheel, with the stock going from $18 to $8 on her watch.

"How is Estée Lauder's stock a thing of beauty, while Avon seems like it fell off the ugly tree and hit every branch on the way down?"

Part of the reason comes down to management, with Estée Lauder being a company that is very well managed. And some might even think it could relate to two different business models, with Estée Lauder selling its products in various retailers around the world and Avon being a direct seller.

However, that argument has major loopholes as somehow Tupperware, another direct seller, managed to blow the lid of its earnings in January.

When Estée Lauder reported on Feb. 5, the CEO delivered an 8-cent earnings beat from a $1.05 basis, higher-than-expected revenues and all-time high gross margins. This was especially a large accomplishment considering the headwinds it faced with the strong dollar.

The good news is that Cramer thinks that Estée Lauder has plenty more room to run going forward. This company breeds innovation and plants a significant amount of funding into research and development for new products.

As for Avon, Cramer cannot say the same. A direct sales company is all about having wonderful sales representatives. Yet the number of active sales reps has declined 5 percent alone in the last quarter and down 4 percent in the previous quarter.

The retention issues have extended globally, as well, with the decision it made to pull out of 13 countries in the Caribbean. It is also unfortunately suffering from currency stress in countries such as Brazil, Russia and Mexico.

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"Sometimes investing is as simple as buying what's beautiful and ignoring what's ugly. Right here right now, Estée Lauder is looking gorgeous while Avon looks like a gargoyle."

Ouch. Time to do a serious management makeover, Avon!

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