Value Stock Analysis as of 23 March 2024
NYSE: The Clorox Company (CLX)
- The Clorox Company produces and sells consumer and professional products globally, divided into four segments: Health and Wellness, Household, Lifestyle, and International.
- The company is globally recognized, operating in 100+ markets across 25 countries, with 80% of its portfolio holding top market positions.
- The company has faced challenges in revenue per share growth over the past two years, while free cash flow per share has consistently risen over the last decade.
- Clorox has encountered margin and profitability challenges due to rising input costs. However, the company is taking steps to mitigate these issues through cost-cutting measures and product innovation.
- The Clorox Company was founded in 1913 and is headquartered in Oakland, California.
Shareholding Patterns of The Clorox Company (CLX)
| Holder | Shares | Date Reported | % Out | Value |
|---|---|---|---|---|
| Vanguard Group Inc | 15,228,948 | Dec 30, 2023 | 12.27% | 2,295,763,911 |
| Blackrock Inc. | 10,119,725 | Dec 30, 2023 | 8.15% | 1,525,548,543 |
| State Street Corporation | 8,401,550 | Dec 30, 2023 | 6.77% | 1,266,533,662 |
| FMR, LLC | 2,986,888 | Dec 30, 2023 | 2.41% | 450,273,366 |
| Geode Capital Management, LLC | 2,959,561 | Dec 30, 2023 | 2.38% | 446,153,820 |
| Morgan Stanley | 2,345,999 | Dec 30, 2023 | 1.89% | 353,659,349 |
| Stifel Financial Corporation | 2,185,941 | Dec 30, 2023 | 1.76% | 329,530,605 |
| Royal Bank of Canada | 2,156,874 | Dec 30, 2023 | 1.74% | 325,148,755 |
| Holocene Advisors, LP | 1,700,101 | Dec 30, 2023 | 1.37% | 256,290,225 |
| Champlain Investment Partners, LLC | 1,600,914 | Dec 30, 2023 | 1.29% | 241,337,785 |
List of Brands under The Clorox Company (CLX):
What we think are pros of business:
- Clorox Company boasts a robust brand reputation and witnessed increased demand during the pandemic.
- Clorox has maintained a track record of consistent dividend growth, which appeals to income investors.
- Established over a century ago, Clorox has a highly reputable brand name, which strengthened during the pandemic with increased demand for its hygiene products.
- Product innovation and brand development have propelled the company to new heights in recent years.
What we think the RISK are:
- Clorox’s growth expectations and valuation are key considerations, especially given its trading performance amid weak fundamentals.
- A cyber attack in 2023 significantly impacted logistics, earnings, and revenue, and the company is still in the process of recovery.
- They also have competition from store brands and other name-brands as well, since Clorox is not the only brand in town.
Fundamentals:
- Market Cap: 18.71 Billion
- Revenue: 7.31 Billion
- 52 Week Range: 114.68 – 178.21
- Dividend: 4.80 (3.25%)
- EPS: 0.64
- PE: 232.54
Technical for a long-term perspective:
- Breakout of a trendline on weekly time frame charts.
- Taking support at its multi year support zone and preparing for the next bounce.
- Price is consolidating in a range and once it crosses above the range then price will shoot up +20%.
- There is also its EMA levels which will acts as a support after the breakout.
- If it falls further then you can also add more quantity at lower price.
Entry = 150
Stop Loss = 140
Target = 168 / 185 / 210
Our Final Thought:
This stock is trading at multiyear support levels and company’s pays regular dividends to their investor and its lower price attract the investors and offer higher dividend yield.
CLX is considered overvalued compared to its peers, and there’s a significant risk that management may struggle to enhance margins. Clorox, renowned for its brands and dividend growth history, has encountered recent hurdles such as a cyberattack and weakened consumer demand. In the near future these will be resolved and management is working to get out of this situation and grow their business.
Please note: This is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
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