Zacks.com releases the latest Analyst
Interview. Today’s interview is with
senior analyst Steven Ralston, who discusses Procter & Gamble (NYSE:
PG), Anheuser Busch (NYSE: BUD), Kraft
(NYSE: KFT)
and Colgate
(NYSE: CL).
A synopsis of today’s Analyst Interview is
presented below. The full article can be read at http://at.zacks.com/?id=2678.
You attended the CAGNY conference recently. Can you give us an
account of what new trends may be developing?
The major topic of the conference was the impact of commodity costs to
the consumer staples companies, especially the effect of record high
grain and energy prices. Companies are overcoming cost increases through
many vehicles.
First, price increases are being accepted by consumers, since commodity
inflation has been broadcasted well by the media. In general, companies
are able to recapture approximately 75% of the cost increases through
price increases, as specifically stated by Procter & Gamble (NYSE:
PG).
Companies are also implementing productivity programs, like Project Blue
Ocean at Anheuser Busch (NYSE: BUD). The combination of price
increases and cost-reduction initiatives more than negate the effect of
higher input costs.
Most managements are plowing back some of the savings from strategic
cost-reduction programs to fund “brand-building”
through new product introductions under their core brand names and
through marketing programs, which include increased advertising. For
example, Kraft
(NYSE: KFT)
is increasing its advertising budget from 7% to 8-9% of sales. Colgate’s
(NYSE: CL)
advertising increased 17% in 2007 – a record
year for company advertising – and management
plans another double-digit increase in 2008. Anheuser Busch’s
total media spending is budgeted to increase 10% in 2008.
Zacks "Profit from the Pros"
e-mail newsletter provides highlights of the latest analysis from Zacks
Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2679.
About Zacks
The performance of the Zacks
Rank portfolios for annual and year-to-date periods are the linked
monthly total returns (price changes + dividends) of equal weighted
hypothetical portfolios, consisting of those stocks with the indicated
Zacks Rank, assuming monthly rebalancing and zero transaction costs.
These are not the returns of actual portfolios. The hypothetical
portfolios were created at the beginning of each month from January 1988
forward based on the values of the Zacks Rank available to Zacks'
clients before the beginning of each month. The portfolios created
monthly from 1988 through September 2006 exclude ADRs and are comprised
of stocks that have the indicated Zacks Rank and were covered by at
least two analysts at the time of the stocks inclusion in the portfolio.
Starting in October 2006 and going forward, the portfolios are comprised
of all stocks with the indicated Zacks Rank and do not exclude ADRs,
which is more reflective of the list of stocks that customers will find
on the Zacks web sites. These performance numbers have been audited from
1995 through 2003 by Virchow, Krause & Company, LLP.
Visit http://www.zacks.com/performance
for information about the performance numbers displayed in this press
release.
Disclaimer: Past performance does not guarantee future results.
Investors should always research companies and securities before making
any investments. Nothing herein should be construed as an offer or
solicitation to buy or sell any security.
|