When FMCG gang behaved like Cyclicals
None of the three cited Consumer companies are growing revenues, Unilever, GSK, Cadbury (except Nestle with stagnant numbers)
Revenues and profits of all companies have shrunk this year. Thats Boko Haram and Oil Price drop for Nigerian investors. I feel that Nestle is over owned. Cadbury experienced sharpest revenue and profit drop. Loved the massive buyback of Cadbury Nigeria in 2014 reducing outstanding shares by a whopping 40% despite huge opposition. GSK needs to up its game before the licence with Suntory runs out to market Ribena and Lucozade. Yet to pull trigger on GSK, own other two. Wrote earlier about GSK here
Brothers and Sisters, these outstanding opportunities are not at 5 times revenues (barring Nestle). At peak all three traded between 5-6 times revenues.
Cadbury and Unilever are ~2 times and GSK at a humble 1 time revenue! As Munger says, “It does not require a lot to make millions, sit on your ass and read, make a few wise decisions infrequently”.
Long term, I am just as optimistic about Africa as about Asia.