10 Best Beauty Stocks To Buy According to Short Sellers

3. Colgate-Palmolive Company (NYSE:CL)

% of shares shorted: 1.00%

Colgate-Palmolive Company (NYSE:CL) was established in 1806, and since then, it has developed into a major force in the home and personal care industries. Apart from its trademarked oral care range, which contributes over 40% of its overall revenue, the company also produces shampoos, shower gels, deodorants, and homecare items that are distributed to more than 200 nations.

About 70% of its entire revenue comes from sales abroad, of which 45% comes from developing countries.

Although there are many worries about customers’ financial stability and eventually their willingness to pay for the essentials in the firm’s portfolio, the company is carefully handling the unpredictable landscape astutely. Colgate’s strategy, led by CEO Noel Wallace, has focused on increasing spending on R&D and marketing (on its core mix, in adjacent categories, and across the digital space) and adapting faster to changing consumer preferences, bringing products to market in as little as six to twelve months in certain cases, compared to the 18 to 36 months it took in the past. Colgate has recorded 22 consecutive quarters at or above its long-term organic sales growth objective of 3%-5%, demonstrating the wisdom of this strategy.

These outcomes are credited to increased brand spending and a renewed emphasis on consumer-valued innovation, even when it comes at a higher cost. Over the last four years, the firm has spent an average of over 12% of sales on marketing, which is 120 basis points more than what was allocated in 2017–19.

ClearBridge Investments mentioned Colgate-Palmolive Company (NYSE:CL) in its Q2 2024 investor letter. Here is what the firm said:

“Colgate-Palmolive, added to the portfolio in 2023, started outperforming materially toward the tail end of last year as growth, margin and market share momentum began to turn favorably, and that momentum has continued year to date as the stock has nicely outperformed the large cap staples group. The fundamental upside has been driven by a combination of healthy organic growth (with positive volumes), good gross margin progression, and strong re-investment spending supporting market share gains and future growth.”

The company has hedge fund sentiments of 52 in Q2 2024. Jean-Marie Eveillard’s First Eagle Investment Management is the largest shareholder in the company, with 9,025,827 shares worth $875.87 million.