We recently published an article about the 8 Best Cleaning Materials Stocks To Invest In Now. Let’s look at where Colgate-Palmolive Company (CL) stands against other cleaning materials stocks to invest in now.
Investors are reacting to an array of geopolitical and economic developments as volatility in the US equity market edges higher heading into year-end. The upcoming US election is posing a significant headwind that is taking a toll on sentiments in the equity markets. Similarly, concerns of a slowing economy crumbling amid high interest rates is also leading investors to rethink their investment portfolios.
Will the Soft Landing Narrative Play Out the Way Investors Want?
On October 16, Saira Malik, Nuveen CIO and head of equities and fixed income, joined CNBC’s ‘Squawk Box’ to discuss the latest market trends, whether the soft landing narrative will play out, and the state of the economy, among others. She said that concerns exist over whether the soft landing narrative will play out the way investors want or not.
Investors are drinking the Kool Aid when it comes to a soft landing, and that can be seen in the earnings seasons so far where companies are coming in reasonably strong, especially in the non-tech side. The consumer also looks strong. But the bar is pretty low for this earnings season, with a 4% year over year earnings growth expected as compared to last quarter’s 11%. Thus, Malik is of the view that the narrative might not play out exactly the way it was anticipated.
How to Hedge Your Portfolio Amid Market Volatility
On August 8, Tiffany McGhee, CEO and CIO of Pivotal Advisors, appeared on CNBC to discuss the market’s volatility and ways to hedge your portfolio. She expressed her inclination towards holding a diversified portfolio and an asset allocation strategy set. She said that it is really exciting getting caught up in the large-cap growth stocks that really drive the performance of the market for so long. But it is really important to have a balance portfolio, and thus she reiterated that investors should really consider having defensive stocks if they don’t have any.
Defensive stocks have long been a popular addition to portfolios, as they hold the potential to protect investors from the transitions of the stock market. They can produce good income, stable returns, and pose long-term value for investors.
Our Methodology
To ranks the 8 best cleaning materials stocks to invest in now, we used the Finviz screener, ETFs, and online rankings to first identify the top cleaning material stocks. We then selected 8 stocks that were also the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of their hedge fund holders as of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
The Colgate-Palmolive Company (NYSE:CL) manufactures and sells various products for the personal and home care markets and operates in two product segments: Oral, Personal, and Home Care, along with Pet Nutrition. The Oral, Personal, and Home Care segment sells cleaning products throughout the globe, managed geographically in five segments, including North America, Europe, Latin America, Africa/Eurasia, and Asia Pacific. These products are sold to wholesalers, traditional and e-commerce retailers, distributors, dentists, and skin health professionals.
The company’s products are sold under several reputable brand names, including Colgate, Palmolive, Irish Spring, Sorriso, Protex, meridol, Axion, Sanex, and several more. The Colgate-Palmolive Company (NYSE:CL) aims to deliver consistent compounded earnings growth, and it is driving balanced organic sales growth across all six divisions and four categories. It is doing so with a combination of volume and pricing growth.
It has revamped its innovation model, invested in marketing spend, leveraged its global strength across price tiers, scaling new capabilities across the organization to drive brand health and boost household penetration. An early success for this strategy is the company’s return to mid-single-digital volume growth in Q2.
The Colgate-Palmolive Company (NYSE:CL) is also leveraging data and analytics tools, including AI, to track the effectiveness of these activities and optimize the return on its increased spending. With the effective combination of the company’s continued success in revenue growth management strategy and increased penetration, it plans to drive consistent, balanced top-line growth. It takes the second spot on our list of the 8 best cleaning material stocks to invest in now.
ClearBridge Investments’ ClearBridge Sustainability Leaders Strategy stated the following regarding Colgate-Palmolive Company (NYSE:CL) in its Q2 2024 investor letter:
“Colgate-Palmolive Company (NYSE:CL), added to the portfolio in 2023, started outperforming materially toward the tail end of last year as growth, margin and market share momentum began to turn favorably, and that momentum has continued year to date as the stock has nicely outperformed the large cap staples group. The fundamental upside has been driven by a combination of healthy organic growth (with positive volumes), good gross margin progression, and strong re-investment spending supporting market share gains and future growth.”
Overall, The Colgate-Palmolive Company (NYSE:CL) ranks 2nd among the 8 best cleaning materials stocks to buy now. While we acknowledge the potential of CL to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
