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Jefferies: Organic Growth In Consumer Products Continues In Double Digits


Jefferies mentions, “Our Coverage Group declined -6.8% in June, only the third month in the last sixteen to post a negative return, with the decline lagging the -5.4% drop in the S&P 500. Our Group's June price performance underperformed the S&P 500 for only the third time in the past seventeen months. The price decline for our Group came on a -0.4% decrease in prospective earnings.”

“Our proxy for Defensive Growth (CHD, CLX, and SMG) declined -7.5% from 4/26/10, when the market began to roll over, to the end of June, while our proxy for Global Growth (AVP, CL, HLF, and TUP) declined -13.8% during that same period. Although Global Growth underperformed Defensive Growth, both groups outperformed the S&P 500 return of -15.0%,” the analysts say.

“On the week, the US$ was broadly mixed, with the largest declines against the euro (-1.3%) and yen (-1.6%) and the largest gains versus the Aussie dollar (+3.9%) and Mexican peso (+3.4%)….We think our Group's exposure to emerging markets, where organic growth continues to pace in the double-digits, coupled with earnings outperformance, should lead to premium valuation, particularly for the direct sellers,” Jefferies adds.

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