Hilary Kramer's Daily Picks & Pans

If you take a look around your house, or at the shelves of your local drugstore or supermarket, you probably have more products from Procter & Gamble  than just about any other company. Tide, Olay, Gillette, Folgers, Pantene -- all of these are P&G brands. In fact, the company has more than 22 brands each with sales of more than $1 billion.

A company like this is a solid addition to any portfolio -- but only at the right price, which means now isn’t the time to buy. Keep in mind that commodity prices and energy costs take time to work their way through to the profits and P&G will likely be hit. In addition, P&G has been a "popular" stock to buy amongst the big mutual funds that may be taking some of their profits off the table come the end of December or if we have a correction and they need to loosen up some liquidity.  

I’m not saying this to knock the company -- there is every reason to expect revenues to keep climbing as they have been for the past couple years. But it’s hard to achieve those eye-catching high growth rates when you’re starting from such a high level, and it looks to me like P&G’s growth will be steady rather than breathtaking. The company is definitely doing what it can, however. Its late 2005 acquisition of Gillette was a very savvy move, taking Procter & Gamble into the growing, high-margin men’s grooming market via one of the most recognizable brands around. As Gillette is integrated, P&G should enjoy even higher margins and profits.

You can also see the vision on a smaller level. With P&G’s coffee division trailing the rest of the company, Folgers has announced it will be introducing higher-end coffees. Whether or not this will be successful remains to be seen, but it’s a smart and creative way to deal with the fact that the market doesn’t necessarily agree that the best part of waking up is Folgers in their cup.  

Beyond the smart management, catchy brands, a constant stream of clever new products (Swiffer, for example), we’re looking at the aging of the baby boomers, one of the wealthiest and vainest generations ever. They’ll be wanting more and more Oil of Olay and CoverGirl for those wrinkles and more Pepto, ThermaCare, and Metamucil. And I’m sure P&G will invent a few more products these aging boomers just can’t live without.

Type of stock: A fully valued company that is highly profitable, immensely respected and which enjoys some of the most popular brands in the world.
Price target: P&G is currently trading just below $62, not far off its 52-week high of $62.50. The stock was down in the low $50s this summer. I’d wait for it to cross under its Janaury 2004 price of $50 before even considering a purchase.

(Photo Credit: AP)

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• #12 Comment from pblcrltnssuck 
  12/27/07 9:25 AM | Permalink

  This is my first time on this board, and I'm currently interested in purchasing my first lot of P&G stock. I'd like to invest $10K, but right now, the stock's trading at $74. When I initially looked at it back in August (could shoot myself for not buying it then!), it was at $65. When is a good time to jump on board, and at what price?
  
  Thanks so much!
• #11 Comment from papadoc2004 
  10/13/06 12:26 PM | Permalink

  I bought the stock in 1957 and have "suffered" thru 7 stock splits !
  "Wait until it is below 50 " That will only happen after the next split.
• #10 Comment from saraphin46 
  9/21/06 7:51 AM | Permalink

  Regarding P & G stock and the company in general for that matter, it seems to me that this is one of the types of stocks one would want as a core holding. People will continue to wash, do laundry and use the myriad of products made by P & G regardless of the economy. Certainly there's nothing speculative about this stock. IMHO this is a stock to buy, hold and reinvest the dividends which grow yearly. IMHO over time and with a little patience this is a no lose stock.
• #9 Comment from reelman1955 
  9/20/06 6:56 PM | Permalink

  hilary did you get named after hilary clinton you poor thing. p&g has always been a leading force in the stock market they have made as you said billions so do you think because you have the capability to sound off that your right man are you wrong I worked for the company for over 25 years and would still be working for them if i didn't make so much money in p&g stock to retire at 46 years old people like you come in and make a statement and the stock slows that's just so you can buy it up and make money yourself. why don't you praise the company and tell people the real story so everyone could make money, don't be so self centered on making profits just for you.
  
                     have a nice day
• #8 Comment from tnientimp 
  9/19/06 6:58 AM | Permalink

  If this is the best Hillary can do then I won't waste my time reading her again.  P and G is one of the best run companies in the world.  While investor interest might cause the stock to drop a normal market will see declines as buying opportunities.  The integration of Gillette has gone smoothly and they continue to stregthen their worldwide brands, profitability and organic growth.
  
  I see only positive things for this Company going forward.  Perhaps Hillary is only trying to get some free advertising by being controversial with such a great Company.  My call she is way off the mark.