Uncle Doug
26 Oct 2017
Re: Only in May 2017 ...... Bill1702"Uncle D - and it is not hanging around at £66 either... currently down another 1.3%, £65.20.You could well be right, of course. But, I am guessing, you probably said all this at £70? At £67? "No. This was my first ever rec on RB. Strong Buy @66 - take it or leave it. I have zero doubt that some time in next 12 months they will hit £70. Be interested to hear your dozen clearer cut bargains so we can do a comparison against RB in a year's time. How's VOD doing btw?
aspace
26 Oct 2017
Re: Sliding Yes I was down on all shares except LLOY which released a good set of Q3 results. The common factor appears to be strengthening of GBP against other currencies, which I have found tends to depress UK share prices. As to Mead Johnson and "What is happening with the "E" part that might drive it upwards again from here - that is not dependent on further big gains from FX?"... I was in China recently and noticed babies and pregnant women everywhere. All because of the relaxation of the one-child policy. This has resulted in a baby boom even among older women in 40s, which of course bodes well for sellers of baby milk powder. Although most mums prefer breast feeding rather than powdered milk. But for those who cannot, or who wish to supplement, foreign milk powder is preferred. Has also become a large market for Australian daigou who buy powdered milk off the retail shop shelf then ship it to China. Problem is MJ's product Enfamil does not have the market cornered and doesn't have much presence in Australia so misses out on the daigou market. There are at least ten competitors esp Australian and New Zealand whose milk is trusted. Fingers crossed MJ knows how to get its fair market share of the Chinese baby boom. There are 1,400 million Chinese of which 50% of female, of which I would guess 25% are of child-bearing age 30% of whom may choose to have a second baby which could mean 1,400 x 50% x 25% x 30% = 53 million extra babies which is about the population of England.
gamesinvestor
25 Oct 2017
Sliding Not sure this is all down to RB, everything is getting punished on any announcement - sign of a nervous market. So many stocks dropped between 2 and 6% today alone.Games -- keeping the cash pile dry and warm !!
gamesinvestor
25 Oct 2017
Re: Only in May 2017 ...... ""Talking of LKH... looks like he's been quiet for over a week now, unusual for him. Anyone heard from the Ancient Mariner?""nothing so far on any of the boards here -- was he at sea? -- I think he mentioned he was in ASIA (Indonesia or some such place).Games
gamesinvestor
24 Oct 2017
Re: Only in May 2017 ...... "There are no clearer bargains in the market right now. What price are you waiting for FFS?"Doug as much as I'd also like to believe it, it's questionable what a bargain is these days.With a P/E of over 20 is it a bargain or just a relatively lower priced company compared to peers - and relatively expensive compared to ?Perhaps the things that we like to measure against are also not bargains - relatively yes, but perhaps not absolutely.I guess someone has already pointed out that RB was working on a P/E of 14 as recently as 2012.I came into this a little prematurely (or a lot maybe) at 67XX.Procter and Gamble is struggling, Unilever is struggling - DGE seemingly less so, although if they keep blowing $billions on fanciful ideas they soon will be.There is definitely a shift in brand trust as pointed out in this article :-[link] brand labels are taking market share, although not to to a massively great extent, but it only needs a few % to make a difference in this game of the squeezed middle consumer.[link] must admit to being a bit of a sceptic toward overpriced branded products from a personal perspective. I guess this is born out of a desire not to leave money on the table - why would I buy an expensive brand of headache tablets at 5-10 times the price of a product with the exact same ingredients, oir bleach, or a washing liquid or .......Having said that I've made a lot of money out of Unilever, PZ Cussons, Diageo, Burberry.I'm just questioning in my own mind if this might reach a cross roads.There are a couple of physcological traits I've learned. One is that when you are owning something or you own something you want to sell, you tend to see only it's high value worth. A kind of self interested justification of your position.Conversely when buying something, one often tries to justify to the seller why the product/company is worth less that that which is in the sellers mind.Games --RB is 1.11% of my wad!! - there, sceptical interest declared !
Uncle Doug
24 Oct 2017
Re: Only in May 2017 ...... BillThis was £71 a couple of weeks ago, £81 5 months ago. It won't hang around these prices for long I can tell ye. It's a screaming BUY so fill yer boots , you know it makes sense. Even if we have a Brexit/Trump meltdown or another recession, RB will stand strong while others falter. There are no clearer bargains in the market right now. What price are you waiting for FFS?
sage in the hills
24 Oct 2017
Re: Only in May 2017 ...... .....good conclusion Bill, AGREED.SAGE
Bill1703
24 Oct 2017
Re: Only in May 2017 ...... ".....your £65 is here Bill, just as you wanted......."Well, not quite SITH... not yet... £65.80 as we speak. But in the words of the song... "Maybe tomorrow...."?? As for the horns of loooNo's dilemma, I wouldn't sell it here, if I owned it... and I am not sure why anyone else would, when you've watched it all the way down from over £81 - and not just for the usual psychological reasons. We're getting very close to the 20%-decline mark now, and that could be important...But, as a confirmed mean-reversionist, I have an inveterate problem in buying anything when still above it's long term 'mean' valuation - albeit only just for RB now. You're kind of locking yourself into a prospective below-average return - unless something is "different this time", and as we know, things are never "different this time", in the end (okay, very rarely).Nonetheless I am waiting, hovering... I need to dig a bit more into the MJ deal, that could well be the one thing that is "different" here (or different enough, anyway). It certainly looks to have the potential, if they get it right, to drive the numbers sufficiently higher to mean that overall returns will still be pretty good, even as (and if) the valuation multiples decline further. If they get it right... history suggests they have around a 35% chance of "getting it right". Although, to be fair, the Reckitt track record suggests they have a somewhat better chance of delivering real value from it than the average....
IoooNo
24 Oct 2017
Re: Only in May 2017 ...... Dilemma ............ buy or sell?
sage in the hills
24 Oct 2017
Re: Only in May 2017 ...... .....your £65 is here Bill, just as you wanted.......SAGE
Bill1703
21 Oct 2017
Re: Only in May 2017 ...... "Reckitt shares currently trade on a forward earnings multiple of 19 times, a big discount (15%) to peers, according to Waldschmidt, who keeps his 'buy' rating and bullish £87 target price..."I still make it pretty much bang on 20x forward EPS... and forecasts have been edging down again (though consensus varies slightly according to which site you look at - but not much). And valuing stocks relative to peers is always a dangerous and circular game... the story quickly falls apart as those peers come likewise crashing back to earth. Just look at ULVR... people eat just a little less ice cream (and only due to the weather, apparently) and the shares are down over 8% in the blink of an eye. "... In 2013 RB. was under £40 from memory. And available on around 14/15 X earnings... strip out FX benefits, around 20X for a business with some topline L4L revenue declines..."So Essential sums it up neatly - pretty much the 'reality check' argument we've been reprising on this board (and those of close peers) for some time now. When you are priced for perfection - with expectations and valuation both high - there is only really one way to go, most often. You can 'justify' pretty much any SP when you are pricing off a peer group which is similarly being puffed ever upwards... but what about relative to history? Relative to reality??As we have said so often, stock valuations tend to cycle back and forward around an historical mean - with the range (P/E) for RB something like 14x-24x. We were up at the high end only recently - and as Essential identifies, it's not as if we have to go very far back when it was down at the low end. So where now? 20x prospective is obviously less vertiginous than it was, but still a bit above the long term 'mean'... and there could be further downgrades to forecasts, if not for this year then for subsequent periods, which still assume better-than-average growth and possibly still rely on FX not turning around from an historically very favourable level. Even with a decent divi hike this year the forward yield is just 2.5%, and (historic) EV/EBITDA of 16x and a FCF yield of around 4% likewise hardly suggest any radical swing back in expectations. I had previously identified £65 as a potential buying level... wasn't sure I would get it, but looks more likely than not now. And it is still probably a not-unreasonable entry level for any investor who is genuinely prepared to be patient (as opposed to those who merely like to think they are). But even then, when I weigh it up against a whole series of interesting stock opportunities - more so than ever, for all the superficial talk of extended market valuations - it remains hard to get too excited. I will continue to watch... and, most likely, continue to wait...
sage in the hills
20 Oct 2017
Re: Only in May 2017 ...... .....sorry, i meant stronger GBP , due to Brexit progress.......hence RB. and Unilever off 2% +SAGE
sage in the hills
20 Oct 2017
Re: Only in May 2017 ...... .....stronger $ today, Unilever down 2% as well ....SAGE
EssentialInvestor
20 Oct 2017
Re: Only in May 2017 ...... In 2013 RB. was under £40 from memory.And available on around 14/15 X earnings.I read the update, where is the growth?.Strip out FX benefits, around 20X for a business with some topline L4L revenue declines...All just IMV, as always.
sage in the hills
20 Oct 2017
Only in May 2017 ...... ....PB. was at £81.00.......evaporation......SAGE
