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Strategies & Market Trends : Value Investing

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Jurgis Bekepuris

To: Graham Osborn who wrote (56007)	9/6/2015 6:21:04 PM
From: Spekulatius	1 Recommendation of 78702

re PG - the stock is still not cheap, with a PE of around 16 (and estimates most likely will come down). It's valuation is similar to Unilever (UL,UN), which has shown somewhat better growth. Part of the reason why PG has shown lackluster results is because the $US has been that strong. This means that the same earnings generated from foreign business in foreign denomination currencies translate into less $US. PG generates the majority of their earnings in foreign denominations, so the strong $US hurts. The other problem PG is dealing with is lack of organic growth. This has put pressure on the rich multiples that PG's valuation metrics used to have. I think this could be bought as a sort of an equity bond with an almost 4% dividend yield, but the total return owning PG stock probably won't shoot the lights out.

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