Nestle (NSRGY)

It's had a total return of 9% over the last 15 years. It raises its dividend 10% yearly over the past 15 years.. Just did a Starbucks joint-venture. It's priced in Francs which is a safe haven. (2.9% dividend, Analysts' price target: CHF86.06)

They just paid $7 billion to have the right to distribute Starbucks coffee. They should be able to leverage this and do well by it. The entire consume sector has been a terribly performing sector as the power shift has moved to Costco and Amazon, who are now introducing their own brands. A totally world-class stock, but it too expensive to buy at these levels.

The problem with many of these consumer product companies is that they become like a conglomerate and need to rationalize. Also because of the internet there are many new startups in the space that attack their businesses. They have some great brands but need to think of ROE more.

(A Top Pick July 7/17 Down 2%) If you look at the long term prospects, this is still a good pick in his opinion. The dividend continues to increase. There are $22 billion worth of assets that will likely be sold off. He would continue to hold it. They have good avenues to increase their product line sales. Yield 3%.

This has been diversifying into things like vitamins, etc. The new CEO is the 1st non-Swiss insider to run the company since about 1905. He is looking to improve the working capital management of the company, which is releasing capital. It’s a gradual, slow growth dividend story, which he likes. Earnings are attractive. The downside is that it is so large that no one can buy it, so there is no long-term upside from that. Feels it has upside from here.

(A Top Pick July 7/17. Up 0.97%.) This gives you global exposure. Over the last year or so, it has risen substantially on the back of currency. Also got a new CEO, the first outsider since the 1900s. They own the big chunk of L'Oreal, which owns a big chunk of Santa Fe. There are a number of catalysts and the CEO is looking at a number of these. If you don't own this, it is one you should look at.

It is his biggest holding. He attended their investment day, talked to senior management and came away feeling quite confident in their future. They are very focused on growth.

One of the world’s greatest consumer companies. #1 in the world in several food categories. Also huge in emerging markets. Loves the company, but the valuation is too high. You are paying 20X earnings. People need to be patient and wait for a better entry price.

(A Top Pick Sept 20/16. Up 11%.) Continues to like this. They generate a pretty decent cash flow, 3%-4% cash flow yield. The balance sheet is relatively strong, however it does continue to own a stake in L’Oreal. If they were to sell that stake, it unlocks a lot of capital which they can use for share buybacks. In the interim, management is focused on slightly improving margins and rationalizing their product line to focus on pet care, water and nutritional products. Derives a significant portion of sales from emerging markets.

(A Top Pick Nov 11/16. Up 22%.) The big story is that they had a first non-Nestle insider take the reins. He is revisiting sacred cows. The big issue he really needs to struggle with is to whether or not to unload the L’Oreal position, which is worth about $26 billion Cdn.

(A Top Pick July 7/17. Down 3.28%.) In the last year or so this has had quite a few transformative events. They put a new CEO in place, the first Nestlé non-insider sincerely 1900s. He is getting rid of some sacred cows. He is also looking to make working capital more efficient. This is a long-term story.

There are a few catalysts happening with this. They announced a Fr.20 billion buy back. Has the first non-Nestlé CEO since the early 1900s. One of the big opportunities is the divestiture of a $27 billion stake in L’Oreal. The kind of stock you just put in your portfolio, and only take out when you need to. Dividend yield of 2.8%. (Analysts’ price target is 83.50 CHF.)

(Top Pick Nov 29/16, Up 9.02%) It was held back because of Brexit. It is a high quality company and trades at a premium. It has a 3.2% dividend and it has grown regularly. They have tremendous brands and a 23% stake in L’Oreal. It is a defensive consumer staples holding.

(A Top Pick Nov 11/16. Up 5.47%.) The total return is between 7% and 9% for the last 15 years. As of January 1, it had a new CEO, the 1^st non-Nestlé CEO to manage the company since the early 1900s. Expects he will continue to focus the company on eking out more cash flow, and improving efficiencies. He will also probably revisit some of the sacred cows. A very good, high quality stock.

This has been one of his long-standing positions. Had lightened up earlier in the year, because it had had a pretty decent run. It has now sold off dramatically with a lot of the consumer staples as an interest play. There has also been some weakness in their earnings growth rate, particularly their top line growth rate. He is positive on them, because they have a new, very well respected CEO coming in. For the 1^st time in about 100 years, it is an outsider, and will come in and make some changes, which he thinks will be positive.