Third Point, a New York-based investment advisor, released its third-quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the Third Point Offshore Fund returned -3.2% compared to a -4.9% return for the S&P 500 Index and -6.1% return for the MSCI World Index. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Third Point discussed stocks like Colgate-Palmolive Company (NYSE:CL) in the Q3 2022 investor letter. Headquartered in New York, New York, Colgate-Palmolive Company (NYSE:CL) is a global consumer goods company. On October 18, 2022, Colgate-Palmolive Company (NYSE:CL) stock closed at $72.92 per share. One-month return of Colgate-Palmolive Company (NYSE:CL) was -2.64% and its shares lost 2.90% of their value over the last 52 weeks. Colgate-Palmolive Company (NYSE:CL) has a market capitalization of $60.824 billion.
Here is what Third Point specifically said about Colgate-Palmolive Company (NYSE:CL) in its Q3 2022 investor letter:
“Third Point recently acquired a significant position in Colgate-Palmolive Company (NYSE:CL). The investment fits several important criteria in the current investment environment. First, the business is defensive and has significant pricing power in inflationary conditions. Second, there is meaningful hidden value in the company’s Hill’s Pet Nutrition business, which we believe would command a premium multiple if separated from Colgate’s consumer assets. Third, there is a favorable industry backdrop in consumer health, with new entrants via spin-offs and potential for consolidation. Finally, the current valuation is attractive both because earnings growth is poised to inflect higher, and because shareholders are paying very little for the optionality around Hill’s or Colgate’s ability to participate in further consolidation in the consumer health sector.
Colgate has a strong portfolio of brands and operates across four categories that should perform well across most economic conditions: oral care, home care, personal care, and pet nutrition. Although Colgate has delivered organic sales growth of 5-6% over the past few years, earnings growth has been disappointing, and the stock has become a perennial underperformer. Foreign exchange headwinds have pressured reported results. Business reinvestment, supply chain disruption, and inflationary pressures have weighed heavily on margins; those headwinds are now reversing. Stepped up investments in demand generation, product innovation, and digital capabilities are starting to pay off. Global supply chain bottlenecks are easing and product availability on the shelf is improving. And, most importantly, raw material, transportation, and wage pressures are stabilizing, and even reversing in some areas, at the same time additional pricing takes effect. Taken together, the stage is set for Colgate to deliver several years of outsized earnings growth, as sales continue to increase, foreign exchange movements are annualized, and margins finally recover…” (Click here to view the full text)
Colgate-Palmolive Company (NYSE:CL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held Colgate-Palmolive Company (NYSE:CL) at the end of the second quarter which was 50 in the previous quarter.
We discussed Colgate-Palmolive Company (NYSE:CL) in another article and shared the 10 most diversified stocks that hedge funds love. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
