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Clorox (CLX - Free Report) is a Zacks Rank #1 (Buy) and it sports an F for Value and a B for Growth. This is the thing that I love to see, a great growth divergence. That means a solid growth style score and weaker value style score. At the same time, Clorox (CLX - Free Report) is not your typical growth story. Let’s explore more about this company in this Bull of The Day article.
Description
The Clorox Company manufactures and markets consumer and professional products. It operates through four segments: Health and Wellness, Household, Lifestyle, and International. The Health and Wellness segment offers cleaning products, such as laundry additives and home care products primarily under the Clorox, Clorox2, Scentiva, Pine-Sol, Liquid-Plumr, Tilex, and Formula 409 brands The company was founded in 1913 and is headquartered in Oakland, California.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For Clorox, I see three consecutive beats Zacks Consensus Estimate that were preceded by a miss. That is great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).
Last quarter saw EPS of $1.51 when $1.20 was expected. The $.31 difference works out to be a 25% positive earnings surprise.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher.
Over the last 60 days, earning estimates have increased for CLX.
Next quarter has moved from a $1.34 to $1.45.
The full year numbers are certainly more important… and they are dramatically different.
This year has moved from $4.30 to $4.55.
Next year is now up to $5.71, a nice move up from $5.48.
Valuation
I mentioned that this stock carries a great growth divergence. When we dig a little deeper, we see that the topline is expected to grow less than 2% this year and just about 3% next year. The valuation, given that low growth is significant at 34x forward earnings. The price to book for CLX is 112x while a the price to sales is only at 2.7x.
The idea behind CLX is earnings growth and with minimal topline growth meager growth in margins, we see that this is a play on the law of large numbers. 2% growth on a very big number is big, add that to a few basis points of margin expansion and you have a big change in earnings growth.
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Bull Of The Day: Clorox (CLX)
Clorox (CLX - Free Report) is a Zacks Rank #1 (Buy) and it sports an F for Value and a B for Growth. This is the thing that I love to see, a great growth divergence. That means a solid growth style score and weaker value style score. At the same time, Clorox (CLX - Free Report) is not your typical growth story. Let’s explore more about this company in this Bull of The Day article.
Description
The Clorox Company manufactures and markets consumer and professional products. It operates through four segments: Health and Wellness, Household, Lifestyle, and International. The Health and Wellness segment offers cleaning products, such as laundry additives and home care products primarily under the Clorox, Clorox2, Scentiva, Pine-Sol, Liquid-Plumr, Tilex, and Formula 409 brands The company was founded in 1913 and is headquartered in Oakland, California.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For Clorox, I see three consecutive beats Zacks Consensus Estimate that were preceded by a miss. That is great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).
Last quarter saw EPS of $1.51 when $1.20 was expected. The $.31 difference works out to be a 25% positive earnings surprise.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher.
Over the last 60 days, earning estimates have increased for CLX.
Next quarter has moved from a $1.34 to $1.45.
The full year numbers are certainly more important… and they are dramatically different.
This year has moved from $4.30 to $4.55.
Next year is now up to $5.71, a nice move up from $5.48.
Valuation
I mentioned that this stock carries a great growth divergence. When we dig a little deeper, we see that the topline is expected to grow less than 2% this year and just about 3% next year. The valuation, given that low growth is significant at 34x forward earnings. The price to book for CLX is 112x while a the price to sales is only at 2.7x.
The idea behind CLX is earnings growth and with minimal topline growth meager growth in margins, we see that this is a play on the law of large numbers. 2% growth on a very big number is big, add that to a few basis points of margin expansion and you have a big change in earnings growth.