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$62.65 2.15 (3.55%)
11/21/2008 4:01 PM

Colgate-Palmolive Company (CL)

CAPS Rating:
*****

The Company manufactures and markets a variety of products in the U.S. and around the world in two distinct business segments: Oral, Personal and Home Care; and Pet Nutrition.

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Avatar NetscribeConsGds (97.44) Submitted: 12/26/06 8:58 AM : Outperform Start Price: $61.94 CL Score: 47.29

Smile wide with Colgate!!! Colgate-Palmolive is a leading global consumer products company, tightly focused on Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate sells its products in over 200 countries under major brand names like Colgate, Palmolive, Mennen, Kolynos, Elmex, Ajax, Hill’s Science Diet and Hill’s Prescription Diet.

The company operates in a highly competitive market and faces stiff competition from arch rival Procter and Gamble’s Crest brand. Colgate and Crest fight neck-to-neck for market share in the United States, though globally, Colgate leads with a 40% share. Colgate’s focus on oral care might outwit a much larger diversified Procter and Gamble and its Crest brand. Albeit, Colgate has a leading market share in China, a country which has a potential of absorbing 4.5 billion tubes by 2010, it might have to fight with its larger opponent Procter and Gamble to retain its position, as the latter has the advantage of leveraging its infrastructure there.

Colgate-Palmolive stock has made a dramatic comeback in the past two years, thanks to the must-needed restructuring initiative launched in 2004. The company’s continuous cost-cutting efforts are being reflected in improved gross margin. Record advertising spending boosted the top-line growth. Further purchase of 84% stake in Tom’s of Maine is likely to start showing up in the bottom line in future quarters.

Looking ahead, the company expects gross profit margins to be up during the fourth quarter and the next year as well. Its global new product pipeline is full, and it anticipates double-digit EPS growth for fiscal years 2006 and 2007. Additionally, the company should reap the benefits of the aggressive restructuring program it has planned.

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Avatar NetscribeConsGds (97.44) Submitted: 5/22/07 8:14 AM

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The global consumer goods giant Colgate-Palmolive with its presences in more than 200 countries is famous for its oral and personal care products. The company to regain its competitive position has undertaken restructuring initiative in 2004, which has benefited the company in the form of improved gross margin. Further, a shift toward higher margin products has helped the company to offset its impact of higher raw material and packaging costs. This improvement in gross margin and other saving initiatives has led to a double-digit increase in worldwide advertising spend has helped to push worldwide sales by 7.5%, while the unit volumes gained by 5.5%.

Colgate has witnessed increase in its market share across categories, particularly its toothpaste market shares have strengthened in key countries around the world including Mexico, Brazil, India, the United Kingdom and Russia. The U.S. Colgate’s worldwide share of the manual toothbrush market share has reached its record high bringing Colgate to be the new global leadership in this category.

The company asserts that it would be able to carry on the momentum gained in its top-line and bottom-line growth and is set to enter the fiscal 2007 with a very full pipeline of new products around the world and an array of very strong integrated marketing campaigns to support them. Moreover growing benefits from the ongoing restructuring program coupled with the continuing shift towards higher margin products should help the company to achieve its long-term goal of 60% gross margin by 2010. These initiatives undertaken by the company makes the stock, a lucrative option to buy at current price level.

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