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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (44182)	9/7/2011 1:09:09 AM
From: Paul Senior	Respond to of 78644

EKS: Fill for me for me today (Tuesday) for a little more NOBGF

To: E_K_S who wrote (44182)	9/8/2011 3:45:06 PM
From: Spekulatius	1 Recommendation Read Replies (1) \| Respond to of 78644

Nestle / NSRGY stock really hit the skids recently - down 3% today. i think this stock may actually get into the buy area here and I would prefer it to PEP - better (and much less paid) management, better products and similar valuation when i look at leverage adjusted values - both are at about 10x EBITDA and Nestle at this point appears less capital intensive than PEP (PEP capex went up since they took on their US bottling operations). Just for fun -how exchange rates influence the earnings look at P6-P8 of their 6 month report nestle.com Earnings are down 5% in CHF, up ~ 10% in Euro and 20% in US$. It just shows how much backwind US companies with international ops have, when they publish their income statements in US$. Nestle stopped their buybacks recently, which imo makes sense with their shares now fairly valued. This is actually one of the companies with smart capital allocations, they used the windfall from Alcon sale to buy back huge amount of shares from 2007-2010, many at much lower cost than today. Another thing - they own 30% of L'Oreal the french cosmetic company. worth about 13B Euro at a very low cost basis (acquired in 1974 for the most part). This holding is not consolidated and they just cash in dividend checks. My guess is that at some point when the bettencourt clan want's to sell, Nestle is going to get a nice chunk of cash from the sale of their stake - i don't believe they will venture into the cosmetic business. economist.com