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Motley Fool  7 hrs ago  Comment 
Here are a few attractive buy candidates in this recession-proof sector.
DailyFinance  Apr 19  Comment 
Filed under: Finance, Business, Small Business You've all seen it -- on TVs and in big-box stories across the country. The red "As Seen on TV" logo is as ubiquitous as its scores of consumer products. Read more...   Permalink | Email...
The Economic Times  Apr 19  Comment 
Sell Godrej Consumer Products Ltd. at a price target of Rs 1580.0 and a stop loss at Rs 1705.0 from entry point
The Economic Times  Apr 10  Comment 
Aseem Kaushik began his career with L’Oréal India in 1995 with the Consumer Products Division. After spending 7 years in CPD sales, he moved to the Professional Products Division in 2002 in Key Account Management.
Japan Today  Apr 6  Comment 
Margarine's fortunes seem to be taking another sad turn, with the owner of Country Crock and I Can't Believe It's Not Butter looking for someone to take the brands off its hands. Consumer products heavyweight Unilever said Thursday it's seeking...
Forbes  Apr 6  Comment 
The consumer products giant is trying to win back its shareholders after a failed Kraft Heinz bid.
Forbes  Apr 6  Comment 
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TOP CONTRIBUTORS

The Toy business leads this category, and by a wide margin. The 3 largest U.S. toymakers, Hasbro (HAS), Mattel (MAT), and JAKKS Pacific (JAKK), were all on the screen for significant periods of time. I think this is another illustration of how the Magic Formula does a lot of the work of digging up beaten down sectors for us. The first quarter is generally a weak one for toymakers, as most of their profits come in the Christmas season (as much as 60%).

The original thought was to separate between Consumer Staples (items that we must buy regardless of our financial condition) and Consumer Discretionary (luxury goods). However, many of the industries above would be ambiguous. For example, we need shoes (making them a staple), but in tight times we may decide to buy a store brand instead of more expensive Nike (NKE), adding a measure of discretion to the purchase. Consumer goods companies can make great long term investments - just ask Warren Buffett, whose investments in Coca-Cola, Anheuser-Busch Companies (BUD), and Procter & Gamble Company (PG) are legendary.

Forces affecting the Retail Industry

Brand is unquestionably the strongest form of competitive advantage in Consumer Goods. However, it's important to also judge the durability of the brand. For example, Coke is a brand known around the world, and has endured over 100 years of competition to still enjoy the top spot in the soda category today. That's a durable brand. Compare this to Gap (GPS).Ten years ago, Gap and it's spin off stores Old Navy and Banana Republic were considered fashionable and chic for the all important teen and college set. Today, the store is avoided by those same groups, lest their fashion sense be ridiculed by friends. That's a fickle brand. It's important to be able to separate a fad from a juggernaut. Add this to the PR problems Mattel faced last year with lead paint, and you have an unwanted sector, with some interesting potential investments.


Distribution is also important in the Consumer Goods sector. A company with a wider distribution network can leverage economies of scale to earn more on their fixed costs. An especially attractive arrangement is when one of these companies has an exclusive deal with a large distributor. Take Anheuser-Busch (BUD), for example. While this firm has an incredibly strong brand, they also require exclusivity from distributors. This allows them to lock out competitors like Molson Coors (TAP) and Miller, protecting profit margins. The soda companies also do this well. Have you noticed that McDonald's (MCD) only sells Coke products, while Pizza Hut (Yum! Brands (YUM)) only sells Pepsi? With these exclusive deals, competitors are blocked from those roads of distribution, protecting profits for the established companies.

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