Billionaire Richard Chilton is Dumping These 5 Stocks

In this article, we will be looking at the 5 stocks that are being dumped by billionaire investor Richard Chilton. If you want to see our detailed analysis of these stocks, Mr. Chilton’s investment philosophy, and Chilton Investment Company’s history and past performance, you can head directly to Billionaire Richard Chilton is Dumping These 10 Stocks.

5. The Clorox Company (NYSE:CLX)

Number of Hedge Fund Holders: 34

The Clorox Company (NYSE:CLX) manufactures and markets consumer and professional products worldwide. It operates through four segments: Health and Wellness, Household, Lifestyle, and International.

This November, DA Davidson analyst Linda Bolton Weiser raised her price target on The Clorox Company (NYSE:CLX) to $162 from $145 and reiterated a Neutral rating on the shares.

Here’s what LRT Capital Management had to say about The Clorox Company (NYSE:CLX) in their first quarter 2021 investor letter:

“For several months now, our largest position has been Clorox – the cleaning products company. Besides wipes, the company also manufactures bleach, charcoal, cat litter, plastic bags, and container products. Clorox benefited during the Covid-19 pandemic from an increased demand for cleaning products. Companies and consumers trust the Clorox brand – a source of the company’s huge competitive advantage.

United Airlines, for example, chose to partner with Clorox in its push to reassure consumers about the safety of air travel. The company is a typical “defensive” holding – subject to very small fluctuations in end market demand. Its branded consumer products remain in strong demand. Historically (pre-Covid), the company’s sales grew in line with GDP, while earnings-per-share grew slightly faster due to operational and financial leverage. We expect sales will decline slightly in the next few quarters as the Covid-19 pandemic comes to an end, but we believe this decline is more than accounted for by the company’s low valuation.

On February 4th, Clorox reported results for Q4 2020, with both earnings and sales beating estimates. Sales grew by +27% (vs. 20% estimate) from the prior year’s Q4, and EPS increased +39% ($2.03 vs. $1.75 expected). The company continues to see robust demand and raised its sales and EPS guidance for the rest of the year. Shares are down 4% year-to-date. We believe the shares are undervalued at 20x trailing and 24x forward earnings and currently represent an excellent opportunity.”