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Clorox (CLX) Appears Promising: What is Driving the Stock?
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If you haven’t included The Clorox Company’s (CLX - Free Report) in your portfolio yet, you could be losing out on a star stock. This Zacks Rank #2 (Buy) company has been gaining consistently on the back of its inherent strength, focus on innovations and its 2020 Strategy. We believe that this company, which has seen its stock price jump 16.1% over the past one year, deserves a hawk-eyed look.
Clorox possesses a diversified brand portfolio that positions the company well above its peers to generate above-average industry growth and sustain itself in the currently challenging environment. Further, the company’s approach to brand management allows each of its brands to develop further, through rigorous research and development (R&D), marketing strategies, financial control and operating leverage.
Additionally, we remain impressed with Clorox’s progress on its 2020 Strategy, which is aimed at boosting growth for the improvement of categories and overall market share. The smooth execution of this strategy has been helping the company achieve cost savings and productivity enhancements. All these factors also led to gross margin expansion in fiscal 2016.
Apart from this, Clorox has always maintained a disciplined capital allocation strategy, focused on making investments to develop its business while using the excess cash to lower debts and enhance its shareholder returns through dividend payouts and share buybacks.
Coming to Clorox’s past performance, we note that the company has surpassed earnings estimates in four of the past five quarters. Though earnings fell short of the consensus estimate by a couple of cents in fourth-quarter fiscal 2016, Clorox delivered a splendid top-line performance, backed by solid volume growth in all segments.
Looking ahead, the company expects another robust year, given its constant focus on these investments and its cost savings plan. This was well reflected in its sturdy sales and earnings guidance for fiscal 2017. Overall, management’s confidence in its core business strategies, progress of the 2020 Strategy, and encouraging outlook reflect immense future potential.
Hence, we suggest investing in Clorox now, before it’s too late.
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Clorox (CLX) Appears Promising: What is Driving the Stock?
If you haven’t included The Clorox Company’s (CLX - Free Report) in your portfolio yet, you could be losing out on a star stock. This Zacks Rank #2 (Buy) company has been gaining consistently on the back of its inherent strength, focus on innovations and its 2020 Strategy. We believe that this company, which has seen its stock price jump 16.1% over the past one year, deserves a hawk-eyed look.
Clorox possesses a diversified brand portfolio that positions the company well above its peers to generate above-average industry growth and sustain itself in the currently challenging environment. Further, the company’s approach to brand management allows each of its brands to develop further, through rigorous research and development (R&D), marketing strategies, financial control and operating leverage.
Additionally, we remain impressed with Clorox’s progress on its 2020 Strategy, which is aimed at boosting growth for the improvement of categories and overall market share. The smooth execution of this strategy has been helping the company achieve cost savings and productivity enhancements. All these factors also led to gross margin expansion in fiscal 2016.
Apart from this, Clorox has always maintained a disciplined capital allocation strategy, focused on making investments to develop its business while using the excess cash to lower debts and enhance its shareholder returns through dividend payouts and share buybacks.
Coming to Clorox’s past performance, we note that the company has surpassed earnings estimates in four of the past five quarters. Though earnings fell short of the consensus estimate by a couple of cents in fourth-quarter fiscal 2016, Clorox delivered a splendid top-line performance, backed by solid volume growth in all segments.
CLOROX CO Price and Consensus
CLOROX CO Price and Consensus | CLOROX CO Quote
Looking ahead, the company expects another robust year, given its constant focus on these investments and its cost savings plan. This was well reflected in its sturdy sales and earnings guidance for fiscal 2017. Overall, management’s confidence in its core business strategies, progress of the 2020 Strategy, and encouraging outlook reflect immense future potential.
Hence, we suggest investing in Clorox now, before it’s too late.
Stocks to Consider
Other well-ranked stocks worth considering in the same space include Reckitt Benckiser Group plc (RBGLY - Free Report) and Castle Brands Inc. , each with a Zacks Rank #1 (Strong Buy), and Colgate-Palmolive Co. (CL - Free Report) , with a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>