Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Procter & Gamble Company (PG), The Clorox Co (CLX): Two Household & Personal Care Stocks to Buy, 1 to Hold

Page 1 of 2

It has been more than two weeks since the earnings season ended. Different industries gave different surprises. Some didn’t. However, the cosmetics, household and personal care (CHPC) space wasn’t one of them. This industry had a tough first quarter of the year. In some cases, weather disturbed the expectations. In other situations, tough comps and soft end markets were claimed to be the main culprits of sequential declines in revenue.

However, what does this tell us about different companies in this space? Are they still attractive investments or not? Let’s have a look.

What the leader had to say

The Procter & Gamble Company (NYSE:PG)

The Procter & Gamble Company (NYSE:PG), the largest company in this space, also took the lead in reporting its earnings this season. The company’s remarks on slow category growth sent warnings down Wall Street, as the company is known to be prescient of macro trends. Although the company didn’t claim it to be the main reason behind its revenue miss, many other companies in this space corroborated The Procter & Gamble Company (NYSE:PG)’s view on the external environment.

With disappointing organic sales growth despite an improvement in market share momentum, we can understand why The Procter & Gamble Company (NYSE:PG) shares under-performed the market since the company’s earnings release. To be sure, with Staples, Inc. (NASDAQ:SPLS)‘ valuations having reached near historic levels over the past couple of months, the bigger question will be whether or not The Procter & Gamble Company (NYSE:PG)’s commentary on the more challenging macro environment is the beginning of a trend or a one-off event.

Either way, I would expect The Procter & Gamble Company (NYSE:PG) shares to take a breather until the company is able to show a marked acceleration in top-line growth.

The return of A.G. Lafley to the CEO office has sent bullish signals to the market as he was the main hero behind the turnaround of the company in 2010. Not only this, but the company is slowly building growth momentum as the market is witnessing the change after the 40/20/10 strategy that the company employed last year (to focus on its top 40 countries and brand categories that generate the most sales and profit; the top 20 innovations with the most growth potential; and the company’s top 10 developing markets).

Weather ruined The Clorox Co (NYSE:CLX)’s results

The Clorox Co (NYSE:CLX)’s management blamed the weather for the company’s earnings miss. Given this quarter’s top-line and EPS miss, it was surprising to see The Clorox Co (NYSE:CLX) shares down only -1.4% on earnings day (vs. S&P 500 (INDEXSP:.INX) -0.9%), particularly as organic revenue fell short in each reported division. The Clorox Co (NYSE:CLX)’s revenue trends are often predicated on compares, with one year’s positives becoming the next year’s negatives.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!