Charles LannonNestleNSRGYCOMMENTFeb 20, 2015

DEO is not a good name to be in. For the same type of underlying safety and dividend growth, take a look at Nestle or PG or UL.

Getting hurt because of all the weight-loss drugs, as well as people turning away from ultra-processed foods. The whole consumer group is struggling. Expectations are for lower revenues, and the PE multiple will be adjusted. Stock will probably continue to trend lower.

His firm's mandate is to invest mainly in Canadian and US equities, so he doesn't know this one all that well. 

Consumer staples are outperforming in the last few days, and that speaks to the advantage of having a balanced portfolio. Companies like KHC, UL, KVUE, and Nestle. It's not that they won't be affected (their costs would go up), but they're far less cyclical than other businesses. Earnings will be much more stable. Earnings could fall 10%, but not 50%. Dividends will be sustained.

Companies like Unilever and Nestle are huge in NA, but huge globally as well.

UL is his choice, as a pretty diversified and pretty safe way to get exposure to EM growth.

Trading near a 10-year low. They own 20% of L'Oreal. Trades at 14x PE. Coffee is 25% of their business.  They have 30 brands with $1 billion of sales. The new CEO will prune the underperforming assets. Strong growth ahead. The stock is on sale, because growth slowed due to carrying too brands.

Buy something blue-chip, stable and will grow long term. Don't rush and chase quick gains. Build slowly.

A terrible one-year chart, but if it was in Canadian dollars, it looks much better. He owns this and has seen sizable gains. A good long-term hold and will benefit from a strong currency.

Core holding. Safe, stable, defensive. Dividend payer and grower. The only currency that hasn't seen negative currency appreciation against the USD is the Swiss franc, and it's good to have exposure to it.