Whirlpool Corp (WHR)

(A Top Pick July 12/16. Up 14%.) A global appliance manufacturer. 70% of its profits come from North America with the balance from Europe and emerging markets. This is a play on repair/renovations, housing turnover, appliance age. Trading at a pretty attractive multiple. In emerging markets, appliance penetration is much lower than in the US. In China it’s 36% and in India it is below 20%. There is lots of room to grow in those markets.

(Top Pick Jun 14/16, Up 15%) Number one appliance manufacturer in the world. It is basically a replacement demand market, mostly from North America. The average appliance is designed to last about 10 years. There is a lot of room around the world to add appliances.

(A Top Pick March 29/16. Down 3%.) A great company and has had a very strong track record up until recently. His thesis was that family formation would finally pick up. That trend really hasn’t happened. Instead we are seeing an opposite trend where people want to live in the core. He sold his holdings.

There is currency impact on their earnings. They have onetime write-offs. There was a recent ruling against the US and pro Korea where they pay subsidies to manufacturers. He is looking for single digit growth in units, but about 1% around the world. They were a couple of cents light from street consensus in earnings.

He likes it very much. It has been quite volatile. It is growing quite smartly. A few things are getting away including that a lot of business comes from internationally and the strengthening US dollar does not help. The world trade organization ruling went against them but he thinks it will be short lived. They have good management and it is a good entry point at this valuation.

They had a slip up in the last quarter. It is a name that is solid. It will always come back. Don’t buy it here because there is no catalyst.

51% of revenues come from US, where they get revenue from the repair, reno, and replacement cycle.

Reward with minimal risk. It is number 1 in all 4 of its markets. Its second half will be improved due to a currency tail wind. 10 times earnings and a 2.8% yield.

(A Top Pick Sept 8/15. Down 0.9%.) An interesting company, and a tale of 2 economies. They get about half their sales from the US and the other half comes from international markets that have been challenged. This is a nice way to get exposure to emerging markets through a developed market company.

He likes this sector because of demographics. The millennials are going to take over from the baby boomers as the biggest demographic in society. These are 30-year-olds that are going to have to buy appliances, buy homes, have families. There is going to be a mountain of demand come out of this. A very well-run firm.

(A Top Pick Aug 13/15. Up 9.48%.) A great name, but has had some volatility. She likes that they have a lot of stuff in their control. Made a couple of big acquisitions in Europe as well as in China, to grow their scale. They did this back in 2006 with Maytag, and took a lot of costs out of the system. The US housing cycle is helping them.

The leading global appliance manufacturer, and is developed and developing markets. 50% of revenues and about 7% of profits come from the US. Penetration rate in the US market is about 79%. The lifespan of appliances is about 10 years, so it is now going through a replacement cycle. Also, there is increasing housing turnover or renovation work. In emerging markets, penetration is about 30% in India and China, so there is lots of long-term potential for them to grow in those markets.

The world’s leading appliance maker. North America accounts for just over 50% of their earnings, with about 25% coming from Europe, 20% from Latin America and 7% from China. Penetration rate is about 79% in the US. Replacement sales accounts for about 50% of industry sales, and the company estimates that that peaked 2005-2006, and the average life for an appliance is about 10 years. Very long-term secular growth. Yield of about 2.3%.

(A Top Pick Aug 13/15. Up 2.13%.) It’s the housing side of things and consumer spending that is doing well in the US economy. The company is getting some product launches and some good momentum. Recently did acquisitions in Europe and China which are starting to do well. Also, has some Brazil exposure amounting to about 15% of its revenue. Still likes.

This is a play on the consumer, which is clearly slowly turning the corner and has been for some time. It is a very good company. Also, has a growing international presence. International sales are very fragmented without a lot of ownership, so it is a tremendous opportunity. Dividend yield of 2.03%.