CL - Colgate-Palmolive: Gladly Holding Yet Currently Not Buying An All Time Favorite

2024-06-23 02:59:53 ET

Summary

• Colgate-Palmolive is one of my all-time favorite holdings.
• This analysis does not change my mind about that, but rather underscores my stance.
• CL’s price elasticities remain attractive in mid-term hindsight, confirming its brand quality.
• However, CL appears to be priced ambitiously, which is why for me, this might not be the right time to expand the position. Various valuation methods indicate mid-term peaks.
• Long-term, this analysis confirms CL to remain one of my portfolio anchors.

Introducing My Approach To CL

Common advice I have heard is that one should not have “favorite stocks” in the sense of "liking" them because it can hinder objective and rational evaluation of investments. Yet I must admit that I see Colgate-Palmolive as one of my all-time favorite holdings. Understand this as a disclaimer regarding potential bias . Not just do I like the company from an investor’s perspective, but also because of consuming their products regularly. I do like businesses whose success and quality can be observed daily. While having “favorite stocks” can sometimes counter rational analysis, on the other hand, psychological effects of regularly seeing the products in supermarkets might be helpful to stick to the "Hold" in "Buy and Hold". Additionally, consumer staples are one of my favorite sectors simply due to their nature of hardly ever being saturated: when the toothpaste tube is empty, you always need to buy a new one....

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