5 Overvalued Stocks to Watch

2. The Clorox Company (NYSE:CLX)

Number of Hedge Fund Holders: 31

P/E Ratio as of September 19: 38.33

The Clorox Company (NYSE:CLX) is a California-based company that manufactures and markets consumer and professional products, operating through four segments – Health and Wellness, Household, Lifestyle, and International. Its P/E ratio of 38.33 is too high for a consumer staples company. 

On September 14, BofA analyst Anna Lizzul reinstated coverage of The Clorox Company (NYSE:CLX) with an Underperform rating and a $130 price target. Gross margins at The Clorox Company (NYSE:CLX) dropped about 800 basis points in FY22 as the company suffered inflation costs over 10-times the typical yearly amount across commodities, manufacturing, and logistics, noted the analyst. She expects cost inflation to continue to be high through the next year. 

According to the second quarter database of Insider Monkey, 31 hedge funds were bullish on The Clorox Company (NYSE:CLX), compared to 26 funds in the earlier quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the leading position holder in the company, with 527,100 shares worth $74.3 million.