Author: Eric Linser, Green Valley Wealth Advisors
Covestor model: Eagle Portfolio
Disclosure: Long CL
We added Colgate-Palmolive (NYSE: CL) to the Eagle Portfolio on June 8, 2011.
Colgate-Palmolive is a global consumer products manufacturer with sales spanning 200 countries. They are a world leader in oral, personal and home care; and pet nutrition. The company has a strong balance sheet and the cash flow generating ability to drive future growth.
We are bullish on the company given its superior combination of top-line growth opportunities, cost-saving initiatives and reinvestment programs, which should drive strong revenue and earnings growth over the foreseeable future.
Given these business metrics, the company now delivering positive results and expected future free cash flow significantly in excess of their cost of capital, we believe Colgate-Palmolive represents the kind of high-quality company we like to invest in.
The stock is currently trading around a 40% discount to our valuation target. Over time, we expect the market to recognize the intrinsic long-term value of the company, to the benefit of investors.
Colgate-Palmolive has the right stuff according to our research and has been purchased in the Eagle Portfolio. You can read our investment philosophy on our manager page, or visit our website at www.GVWealth.com.
