PG

I Need a CFA® Charter Holder in My Practice – Financial Advisor

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Financial advisors and individual investors are always looking for the best. I had a conversation with one of our most valued clients this week. I’ve withheld his name and firm for the sake of privacy. We talked extensively about the significant back-testing he performed in constructing a portfolio that was optimized for a number of dynamics. The portfolio he created performed significantly better than the broad market benchmark during the past decade, but most importantly, its maximum drawdown at the depths of the Great Recession was a mirror fraction of that of the S&P 500 (SPY), and the length to recovery was materially shorter than it took the broader market to get back on its feet. I was impressed with … Read more

Torn on Procter & Gamble

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Image Source: Phil Manker When Procter & Gamble (PG) first reported its calendar fourth-quarter 2014 results in January, we came out on the stock suggesting investors need not panic. When we rolled the model forward (what this means), however, our team was left scratching our heads. We ended up cutting our fair value estimate on P&G’s shares to $74 from $84, and we felt we were even being generous to get to the mid-$70s with that estimate. We’re torn. We love the strength of Procter & Gamble’s core brands (especially Pampers, Tide, and Gillette), its dividend track record, and its robust free cash flow, but its valuation has become out of line – mostly due to a reset of its … Read more

Dividend Increases for the Week Ending April 17

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Below we provide a list of firms that raised their dividends during the week ending April 17. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Blackstone Group (BX): now $0.89 per share quarterly dividend, was $0.78. CSX (CSX): now $0.18 per share quarterly dividend, was $0.16. Discover Financial Services (DFS): now $0.28 per share quarterly dividend, was $0.24. Donegal Group (DGICA): now $0.135 per share quarterly dividend, was $0.1315. Fidelity Southern (LION): now $0.10 per share quarterly dividend, was $0.09. General Motors (GM): now $0.36 per share quarterly dividend, was $0.30. … Read more

Berkshire Scoops Up Duracell; Hasbro Ponders Dreamworks

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Edited November 14, 2014. We should have known that Warren Buffett (BRK.A, BRK.B) was interested in acquiring Procter & Gamble’s (PG) battery business, Duracell. Today, we found out that he was. In exchange for a recapitalized Duracell Company, including $1.7 billion in cash at closing, Berkshire Hathaway will fork over $4.7 billion worth of Procter & Gamble shares to the former parent to bring Duracell’s operations into Berkshire Hathaway. The transaction is expected to close in the second half of 2015. We think it’s mostly a win for Procter & Gamble. The company had announced its decision to shed Duracell in its most recent quarterly report, a move we had been heavily in favor of. Based on trading action following … Read more

This Just Feels Different…Mr. Brown

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We think the correction is coming. Here are 7 reasons why we plan to reduce exposure to cyclicals and add some protection to the portfolios. By Brian Nelson, CFA I hope you don’t mind my using baseball analogies. Baseball and investing are perhaps the only two endeavors where if you get more than half right, you’re at the top of the list. In any case, you don’t have to be a big baseball fan to appreciate the similarities. I used an example with Ted Williams in this piece about fat pitch investing, but there’s another analogy that is worth sharing. I’ve been to the Louisville Slugger Museum and Factory Tour a few times in the past couple years. My little … Read more

The Dividend Dilemma

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One of the core tenets of the Valuentum process not only rests in the all-important price vs. value consideration (see Valuentum’s Brian Nelson talk about that here), but also in “letting winners run.” At first read, these two items appear to be at odds with each other. For example, we preach about getting stocks at a bargain, but yet, we don’t sell holdings when they start to move beyond our estimate of their fair value. What gives? At the Valuentum core, we prefer an entry point that corresponds to the time when shares have substantial valuation and pricing support (i.e. they have high Valuentum Buying Index ratings), and we prefer an exit point when shares have little valuation and pricing … Read more

Procter & Gamble Wraps Up a Strong Fiscal Year 2014

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Procter & Gamble (PG) reported strong fiscal fourth-quarter results Friday. The April-June quarter revealed organic sales expansion of 2% thanks to strong pricing expansion and core earnings-per-share growth of 20%, to $0.95. Excluding the negative impact of foreign exchange, currency-neutral core earnings per share increased 25%. We continue to like the pricing power of Procter & Gamble’s brands, and the pace of earnings growth was fantastic during the last quarter of its fiscal year. Management continues to deliver on its top and bottom-line commitments. P&G’s brands include Tide, Ariel, Gillette, Venus, Bounty, Charmin, Pantene, Olay, Pampers, Crest, Oral-B, Duracell, and Vicks. These brands aren’t going away anytime soon, in our view. Though management indicated that it will shed some lower-margin brands, … Read more