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P&G (PG) Hits 52-Week High, Starts Exchange Offer with Coty
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On Sep 2, shares of The Procter & Gamble Company (PG - Free Report) rallied to a new 52-week high of $88.87. The stock pulled back to end the trading session on Friday at $88.20. This consumer goods giant with a market cap of around $235.44 billion has seen its shares rise roughly 11.1% so far this year as against a 6.6% increase for the S&P 500 over the same period.
Though weak sales have been offsetting margin improvement from pricing gains and cost cuts for some time now, P&G is investing in its brands and products as well as re-designing the supply chain to boost productivity and organic growth.
Under the portfolio strengthening and simplification plans announced in Aug 2014, P&G aims to streamline its business and focus more on prime brands, including Billion Dollar Brands like Tide, Pampers and Oral-B.
Per the strategy, that is nearing its completion, the company has eliminated almost 60% of its brands (roughly 105 brands) that were witnessing decline in sales and profits.
Late last week, P&G initiated an exchange offer for the separation of “P&G Specialty Beauty Brands” as the company proceeds with its proposed tax-efficient Reverse Morris Trust transaction with Coty Inc. COTY, announced on Jul 9, 2015.
Following the closure of the beauty brands merger with Coty this October, P&G will have a portfolio of about 65 consumer and shopper-preferred leading brands focused on 10 categories under four industry-based sectors. Traditionally, these brands have grown faster and have proved more profitable than the others.
Though the divesture of the underperforming brands will hurt near-term sales, it is expected to boost profits over the long haul.
Notably, the company’s organic sales rose 2% in fourth-quarter fiscal 2016 driven by positive volumes for the first time in years.
Zacks Rank & Key Picks
P&G currently has a Zacks Rank #3 (Hold). Better-ranked consumer staples stocks are The Clorox Company (CLX - Free Report) and Colgate-Palmolive Co. (CL - Free Report) . While Clorox sports a Zacks Rank #1 (Strong Buy), Colgate-Palmolive carries a Zacks Rank #2 (Buy).
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P&G (PG) Hits 52-Week High, Starts Exchange Offer with Coty
On Sep 2, shares of The Procter & Gamble Company (PG - Free Report) rallied to a new 52-week high of $88.87. The stock pulled back to end the trading session on Friday at $88.20. This consumer goods giant with a market cap of around $235.44 billion has seen its shares rise roughly 11.1% so far this year as against a 6.6% increase for the S&P 500 over the same period.
PROCTER & GAMBL Price
PROCTER & GAMBL Price | PROCTER & GAMBL Quote
What’s Driving P&G?
Though weak sales have been offsetting margin improvement from pricing gains and cost cuts for some time now, P&G is investing in its brands and products as well as re-designing the supply chain to boost productivity and organic growth.
Under the portfolio strengthening and simplification plans announced in Aug 2014, P&G aims to streamline its business and focus more on prime brands, including Billion Dollar Brands like Tide, Pampers and Oral-B.
Per the strategy, that is nearing its completion, the company has eliminated almost 60% of its brands (roughly 105 brands) that were witnessing decline in sales and profits.
Late last week, P&G initiated an exchange offer for the separation of “P&G Specialty Beauty Brands” as the company proceeds with its proposed tax-efficient Reverse Morris Trust transaction with Coty Inc. COTY, announced on Jul 9, 2015.
Following the closure of the beauty brands merger with Coty this October, P&G will have a portfolio of about 65 consumer and shopper-preferred leading brands focused on 10 categories under four industry-based sectors. Traditionally, these brands have grown faster and have proved more profitable than the others.
Though the divesture of the underperforming brands will hurt near-term sales, it is expected to boost profits over the long haul.
Notably, the company’s organic sales rose 2% in fourth-quarter fiscal 2016 driven by positive volumes for the first time in years.
Zacks Rank & Key Picks
P&G currently has a Zacks Rank #3 (Hold). Better-ranked consumer staples stocks are The Clorox Company (CLX - Free Report) and Colgate-Palmolive Co. (CL - Free Report) . While Clorox sports a Zacks Rank #1 (Strong Buy), Colgate-Palmolive carries a Zacks Rank #2 (Buy).
Confidential: Zacks' Best Investment Ideas
Would you like to see a hand-picked ""all-star"" selection of investment ideas from the man who heads up Zacks' trading and investing services? Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand. Click for his selected trades right now >>