When reading a post with a keyboard, you can type the keys , and . to move backwards and forward between posts! You can also press 'return' to read through posts one at a time. There's freedom in Shrewd'm!
- Manlobbi
Personal Finance Topics / Macroeconomic Trends and Risks❤
No. of Recommendations: 1
...again is lower than at any point during the last 3.5 years (apart from around the beginning of this year).
But in the meantime there is a bonus point: It's Swiss, not US 😉
No. of Recommendations: 3
It's doing great in US dollars!
I bought on Dec 27 at $82.61 and today it's $98.10 for a gain of 18.75%.
Let me enjoy my imaginary gains, I don't want to know how far the USD has fallen since then (9.8%). 18.75% means I am Buffett, 8.75% (1.1875/1.098-1) means I just got lucky.
No. of Recommendations: 6
I suggest to again have a look at Nestle. Not in USD, but in it's home currency, CHF. Fallen so much that they are now nearly exactly where they were 10 years ago. 3.5% dividend, super stable dividend history, one of the rare "forever" companies you never get cheap --- but currently far more reasonabley priced than since a long time. Why? Because they are having problems. But for me one of the few companies I am waiting for such, so that thrifty me gets a buying opportunity.
No. of Recommendations: 0
Btw: Cheap measured on both, it's own P/E and it's P/S history.
Irrelevant of course should their problems worsen; otherwise an entry opportunity (which I used, for a small first tranche).
No. of Recommendations: 2
I am very bearish on food brands - they are losing market share to house brands as well as locally produced items; I see this trend accelerating over time.
tecmo
...
No. of Recommendations: 2
Not just Nestle. Many top food and beverage companies fallen a lot in the post Covid years, struggling to deal with inflation and shortages. And also the increasing market power of Walmart, Costco, Amazon, Aldi etc.
Pepsi, Kraft, Hershey, Diageo, Constellation Brands, all at 4-5 year lows.
No. of Recommendations: 1
House brands eating name brands is a US phenomenon. Nestle and UniLever are global companies. 65% of Nestle revenues are from outside the US. Probably > 80% of Unilever revenues are non-US (hard to compute exactly, but Unilever says 35% for US+China+India and 44% developed markets).
No. of Recommendations: 2
65% of Nestle revenues are from outside the US.
So that means 35% of their revenue is at risk to house brands; doesn't seem like a great position to be in.
tecmo
...
No. of Recommendations: 3
Pepsi, Kraft, Hershey, Diageo, Constellation Brands, all at 4-5 year lows.
Nestlé is far more than just food for humans. Anyone here into cats or dogs? Nearly no way around Nestlé. Still available for the same price as 10 years ago.
Anyone here who would love to buy Costco if it falls a lot? If so I suggest to have a look at a Nestlé 25 year or longer chart: It NEVER falls - apart from the last 3 years. You can put a linear to it and it perfectly fits. Berkshire is a super volatile speculative investment compared to Nestlé.
No. of Recommendations: 4
Having a look at free cashflow generation it's similar to what it was 15 years ago. I wonder perhaps if the market is pricing in the low growth and the PE is drifting down to 15 x PE which would be a price of 60 vs the current 73 Swiss.
No. of Recommendations: 18
Nestlé is far more than just food for humans. Anyone here into cats or dogs? Nearly no way around Nestlé. Still available for the same price as 10 years ago.
Anyone here who would love to buy Costco if it falls a lot? If so I suggest to have a look at a Nestlé 25 year or longer chart: It NEVER falls - apart from the last 3 years. You can put a linear to it and it perfectly fits. Berkshire is a super volatile speculative investment compared to Nestlé.
I agree with all you say about Nestle, and I've respected them hugely and wanted to own it for a long time. But the problem is that they really have not prospered for quite a few years now. So, the investment case rests on the assumption that the rut is transient. Five years of flat revenue and rising debt and sputtering profitability, at a glance. Payout ratio around 80%, so one more modest mis-step and there's a dividend cut on the horizon, which won't be good for the stock price for some time given the sort of folks who likely own it. All of those worries could be forgiven if it were dirt cheap, but it doesn't seem to be. Not expensive, but it's cheap mainly only in comparison to its own past when the business was doing better.
Maybe there will be a market swoon at some point and it will move from "cheaper than usual" to "actually cheap", and the worries will be covered by the margin of safety.
Jim
No. of Recommendations: 1
the investment case rests on the assumption that the rut is transient.
...... it's cheap mainly only in comparison to its own past when the business was doing better.
I fully agree. There are good reasons why it´s cheap (measured on it´s own past). But that´s the whole point of a "falling knife", isn´t it? That you catch it only when you think a great company has temporary problems they get to grips (as it once was the case e.g. with Coke if I remember correctly). I have enough trust in Nestlé do believe they do and will continue to be a great company.
No. of Recommendations: 1
While I love their products and admire Swiss culture/business, I have a problem with Nestle's method for acquiring spring water rights for their bottled water. I am given to understand that indigenous peoples lose the right to spring water on their own land and have to travel on foot to other sources.
No. of Recommendations: 3
I didn't know that, but it reminds me on the ethical problems I already had with Nestlé at least in the past because of them having fed cats by purpose overweight for their product studies.
Said, cat lover.
No. of Recommendations: 2
...and then there's the whole baby formula issues, which admittedly are ancient, but have me backing off buying the company's products or stock.
IP
No. of Recommendations: 6
I have enough trust in Nestlé do believe they do and will continue to be a great company.
That has traditionally been my view. They didn't become the world's biggest food company by being bunglers, historically. I have been extremely impressed with their long term view on many things.
But the stumbles are hard to ignore. How many CEO's have they had in the last couple of years? Four now?
More importantly, it is very hard to distinguish between cyclical trouble and end-of-an-era trouble.
Jim
No. of Recommendations: 0
I've never invested in them and wasn't aware of all of the controversies with them. There is a brief article covering several of them
https://utopia.org/guide/crime-controversy-nestles... And now
Nestlé investors are reportedly calling for chair Paul Bulcke to step down immediately, holding him responsible for a period of turmoil at the Swiss food giant after the exit of two chief executives in just over a year, the Financial Times reported. https://www.storyboard18.com/brand-makers/nestle-i... Interesting my searching came across someone who was Chairman and Managing director of Nestle India who seemed to have a good approach to leadership which doesn't seem to match what I've seen in my brief look at Nestle. He said
His message was clear: great leadership is less about power and more about people. "In a crisis, you don't run a company, you serve a family," he said, defining his leadership philosophy with unflinching clarity.
https://www.storyboard18.com/brand-makers/in-a-cri...Anyhow I have no money in Nestle and I doubt I would since I don't know much about them.
Good luck
Rich
