The beauty about The Procter & Gamble Company (NYSE:PG) is its robust product portfolio and exposure to emerging markets. Billionaire BIll Ackman of Pershing Square is also a big fan of P&G. He believes there’s upwards of 60% upside for the company by June 2015.
The consumer-products company has 50 “Leadership Brands” that make up 90% of its profits. These generate $1 billion to over $10 billion in sales annually, each. Part of its turnaround plans include boosting results in developed markets, while also tapping new emerging markets. This includes focusing on its 40 most profitable businesses and 20 biggest innovations. The 20-top innovations have stronger growth potential than the rest of the product portfolio.
In recent days, The Procter & Gamble Company (NYSE:PG) reported fiscal 4Q EPS of $0.79, compared to $0.82 for the same quarter last year. Organic sales growth was up 4% year-over-year. For 4Q, product innovation proved to be a growth driver for the company. Its healthcare (i.e. Oral-B) unit saw 7% organic sales growth and 4% volume growth thanks to new brands.
Going forward, The Procter & Gamble Company (NYSE:PG) is looking to grow EPS by 5% to 7% in fiscal 2014, with organic sales growth of 4%. This growth is expected to be driven by key gains in both developed and developing markets, thanks to innovation and productivity initiatives. The Procter & Gamble Company (NYSE:PG) hopes to continue boosting its exposure to the fast-growing developing markets, where sales from these regions only accounted for 40% of sales in 2012.
Bottom line
Oracle Corporation (NYSE:ORCL) is a solid investment that’s been misunderstood thanks to its transition to software. The tech stock is trading well below major peer SAP at 14.5 times earnings, compared to SAP’s 22.5 times.
Meanwhile, I also like Yacktman’s bet on The Procter & Gamble Company (NYSE:PG). I believe the stock is a turnaround story, which is rare in the large-cap space. The stock also pay investors a near 3% dividend yield. As for Exxon Mobil Corporation (NYSE:XOM), I’m not overly excited about the company given its valuation and dividend yield — I think there’s better stocks offering higher dividend yields.
The article Billion-Dollar Fund Gets Offensive originally appeared on Fool.com is written by Marshall Hargrave.
Marshall Hargrave owns shares of Procter & Gamble. The Motley Fool recommends Procter & Gamble. The Motley Fool owns shares of Oracle. Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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