Unilever Share Discussion Threads

[yump] 20/10/2021 15:46

EI

I think a mix of easing and reversing is exactly what happens with very large businesses. When they used to be less 'global', there was less competitive pressure, fewer variables at work, etc. etc. So at least substantial parts of the businesses could enjoy several years of modest growth and security.

Now it seems to me that, at best, parts of a business go up and parts go down, but much more dramatically than in the past. At best, it all gets averaged out.

I think that puts businesses like Unilever at a higher risk level - I don't think size gives the stability that it used to and I don't believe that past success by guru investors who always quoted 'value' is necessarily applicable now.

[yump] 20/10/2021 15:40

shieldbug

No need to make a crazy comment in the opposite direction to try to justify buying what you see as value here.

You can buy value in a share that is not in the FTSE, but is actually on a recovery or upward path.

It would be interesting to trace FTSE 'value' plays over the last 5 years or so and see where they've gone. Perhaps you have.

[essentialinvestor] 20/10/2021 15:17

Sold 4 positions this morning which I considered may be impacted
if we are looking at COVID restrictions once again - hopefully we can avoid lockdown,
but work from home advice etc would not surprise me.

On current markets much now looks fully priced. I don't consider Unilever as
one of those, but obvs have no crystal ball. Many of the headwinds Unilever currently
face should ease and some reverse over the next 12 months.

[shieldbug] 20/10/2021 14:53

Otherwise known as value investing. My advice would be find some share that is very popular, massively over priced and buy, buy, buy!

[yump] 20/10/2021 14:16

The idea is to make money so if a share or a type of business is becoming unpopular, its a brave person that fights that battle.

[shieldbug] 20/10/2021 10:29

Essential you cannot expect investors to distinguish between share price and performance. They are only interested in the share price - nothing else matters. They lead such rich lives.

[essentialinvestor] 20/10/2021 09:55

blue, what point?- would that be record profitability, record dividends, record cash flow?. That is what has actually happened.


That being said, expect a FY margin guidance cut tomorrow given logistics, labour and raw materials.

[essentialinvestor] 20/10/2021 09:43

Fwiw operating performance has remained steady to this point.

Record dividends, prodigious free cash flow and a reduction in share count.

The business continues to be remodelled slowly, the tea asset disposals
the latest measure as the pivot towards higher growth segments continues.
However, given the size of the business this is not an overnight process.

Unilever is currently dealing with a stronger £, coupled with weakness in some EM
currencies and some extraordinary raw material price increase -
Palm oil is Up by over 50% over 18 months as one example.
Now logistics and some labor costs are an additional issue - but we may be near peak headwinds here.


Mentioned here a number of weeks ago that sub £38 might provide a nice longer term
opportunity and I added yesterday below £38 - obvs I don't have a crystal ball so
very much a case of DYOR.

[bluemango] 20/10/2021 09:34

Add to that a current management that prioritises pandering to short term political fads to the detriment of profitability, and you begin to see how we reached this point.

[yump] 20/10/2021 09:28

I think its important to understand that running a business of this size is totally different compared to even 20 years ago.

If the reality is that your capital is destroyed while you get 4%, then you’d better be sure you only want the 4%, not the capital and also that your’re not invested in a business that is declining because of lack of defensive properties in the real world, or a gradual increase in competition.

There is no rule that large businesses go on forever. The only rule is that regardless of how badly they’re run, the BOD will be financially rewarded big time.

[1nf3rn0] 20/10/2021 08:53

Nestlé up over 3% on their update today

[careful] 19/10/2021 17:11

Procter did achieve impressive top line growth.
Some economists think that this inflation will fall by the end of 2022.

Time will tell.

Hard to believe that these transportation cost will hold up.
Too easy to ramp up supply.
easy money to be made, cost of entry not high.

[llef] 19/10/2021 16:52

Proctor and Gamble results out today.
They said this re rising costs..

"Gross margin for the quarter decreased 370 basis points versus year ago, 390 basis points on a currency-neutral basis. The decrease in gross margin was driven by 350 basis points of commodity cost increases, 80 basis points of unfavorable mix (primarily due to product and pack-size mix), 50 basis points of higher transportation costs and 60 basis points of product and packaging investments and other impacts. These decreases were partially offset by 100 basis points of gross manufacturing productivity savings (50 basis points net of higher transportation costs) and 50 basis points of pricing benefits."

[laurence llewelyn binliner] 19/10/2021 15:31

TU on Thursday will undoubtedly report inflationary headwinds, raw materials, energy, distribution, and wages combined make quite an impact, but Kraft are reporting they have already passed a lot of costs onto the consumer directly at the checkout or through smaller packets or bottles of everything.., ULVR must be doing the same and these will filter through to the bottom line in Q4...So long as the dividend does not get clipped I see value at the current SP...

[justiceforthemany] 19/10/2021 15:19

Low volume actually: 40% usual with one hour to go.

[shieldbug] 19/10/2021 15:12

Can anyone explain why Warren Buffett would want tarnished Unilever? Kraft Heinz is such a shining success.

[shieldbug] 19/10/2021 15:09

Analysts' consensus don't look horrendous all things considered. Price looks excellent for accumulating.

[justiceforthemany] 19/10/2021 15:08

Trading lower than the crash of March 2020. Justified or not?

[justiceforthemany] 19/10/2021 14:55

Warren Buffett may be having another look here...

[spoole5] 19/10/2021 14:51

Only saving grace is the buybacks at these levels

[essentialinvestor] 19/10/2021 14:24

Activist I would guess, wanting the food business spun off.

[spoole5] 19/10/2021 14:15

Sitting target for private equity

[essentialinvestor] 19/10/2021 13:44

As mentioned over the last few weeks looks like sub £38
and this may present a nice longer term opportunity.

Obvs need to see what they say on the Q3, but we should be around maximum headwinds
area here with commodity inflation and some EM currency weakness.

[spoole5] 19/10/2021 13:31

Problems partly inflation but also partly management