
NYSE:CLX
Their biggest problem is that it is in “consumer staples”, a sector that is very expensive. These companies have very little scope for growth. There was expensive premiumization on a lot of these companies and not in a position to trade down as people wanted less expensive products. There was also a lot of reliance on growth in emerging markets, which has decelerated very sharply.
This is a part of the whole consumers package goods business that is under incredible pressure from commoditization. The stock has done very, very well. It had high PEs just because of the quality of their cash flow and that their brand names are recognized. Now that we are getting into higher interest rates, that is going to start to get squeezed. Maybe the weakening of the US$ will allow some foreign profits to come through a little better, but generally the group is under a lot of pressure from generics, etc. If you own it, you are not going to lose a lot of money.