Two Top Breakouts in Consumer Products

12/17/2018 5:00 am EST

Focus: CONSUMER

Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

Leo Fasciocco, editor of Ticker Tape Digest, looks for stocks breaking out of established trading ranges, such as these two consumer products firms showing bullish technical action. Both are recommended for conservative investors.

Church & Dwight (CHD) makes household, personal care and specialty products, especially for cleaning. Its products include KABOOM cleaning products, ARRID antiperspirant, CLOSE-UP and AIM toothpastes and SIMPLY SALINE nasal saline moisturizer.

The company sells its consumer products in  Canada, France, China, Australia, the United Kingdom, Mexico and Brazil. Its SPD segment is a producer of sodium bicarbonate, which it sells together with other specialty inorganic chemicals for  industrial, institutional, medical and food applications.  

The stock's long-term chart shows it is a steady climber, rising from $20 back in 2011 to a recent new high of $68.71.The stock has performed very well the past six months. That is good action considering the stock market's near-term down trend.

This year, analysts are forecasting an 18% increase in net to $2.28 a share from the $1.94 the year before. The stock sells with a price-earnings ratio of 29. That is high given earnings growth rate; 12 analysts track the stock.

Net for the upcoming fourth quarter is expected to be up 12% to 58 cents a share from the 52 cents the year before. The highest estimate is at 59 cents a share.

We see good chances for an upside earnings surprise. The company topped the consensus the past four quarters by 4 cents a share, 2 cents, 2 cents and 2 cents.

Looking ahead to 2019, the Street predicts an 8% rise in net to $2.47 a share from the anticipated $2.28 this year. We are targeting CHD for a move to $78 off this breakout. A protective stop can be placed near $65.

Procter & Gamble (PG) sells its products in in some 180 countries through mass merchandisers, grocery stores, membership club stores, drug stores, department stores, distributors, baby stores, specialty beauty stores and e-commerce.

It offers products under brands such as Olay, Old Spice, Safeguard, Head & Shoulders, Pantene, Rejoice, Mach3, Prestobarba, Venus, Cascade, Dawn, Febreze, Mr. Clean, Bounty and Charmin.  

PG's 12-month performance chart shows the stock up 5% versus a breakeven for the stock market. PG's daily chart shows the stock climbing from $80 back in October to a peak near $94. The move carries the stock to a new all-time high. That is bullish.

This fiscal year ending in June analysts predict a 5% increase in net to $4.41 a share from the $4.22 a year ago. The stock sells with a price-earnings ratio of 21. That is high given the growth rate.

Net for the upcoming fiscal second quarter ending in December is expected to rise a modest 2% to $1.21 a share from the $1.19 the year before. Profits for the fiscal third quarter ending in March should be up 7% to $1.07 a share from the $1 the year before.   

Going out to fiscal 2020 ending in June, the Street looks for a 7% rise in net to $4.71 a share from the anticipated $4.41 this fiscal year.

We are targeting a move to $110. A protective stop can be placed near $94 which is tight.The stock is suit for conservative bullish investors.

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