BUZZ-L'Oreal: is it worth it?

** Aberdeen AM's Bertie Thomson keeping an eye on valuation of L'Oreal, one of many quality cos swept higher by what he calls the "bond-proxy Ponzi scheme" which has lured yield-starved investors into sometimes paying over the odds

** L'Oreal is "fantastic" co with "impossible to replicate" brands, but on c.29x next yr's forecast earnings is "pushing the envelope" of valuation, says Thomson, senior investment manager of FM's Global-European Equity Fund (holder of stock)

** British American Tobacco (LSE: BATS.L - news) (BAT) & drugmaker Roche , on 18x & 20x next yr's forecast earnings respectively, are cos Thomson "more relaxed about" (holds both) amid "genuine valuation risk for a number of equities"

** PM highlights strong customer loyalty to BAT's brands which gives co pricing flexibility, a key consideration when the number of people who smoke in the world is in decline

** Roche: mid-single digit FCF yield & high single digit growth rate long-term means c.12 pct combined return which Thomson sees as durable given unique position in oncology & biologic products which are hard to copy

** Also holds Novo Nordisk (Other OTC: NONOF - news) , world's biggest insulin producer; PM flags diabetics' tendency to be loyal to their insulin brand

** As a firm Aberdeen AM manages c.£323 bln of assets

** More on bond proxies: (RM (LSE: RM.L - news) : tricia.wright1.thomsonreuters.com@reuters.net)