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Company: Clorox Company (CLX)
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23 votes

  Clorox Has a Majority Market Share in 12 of 17 Household Product Categories

Clorox's Glad bags, Clorox bleach, Formula 409, and Pine-Sol products are all highly recognized brands and hold the lead in market share in 12 out of 17 household product categories. Within North America, Kingsford / Matchlight charcoal hold a 77% market share, Brita water filters 68%, and Clorox bleach 65%. In total, the company has 93 products with either No. 1 or No. 2 market share worldwide. The Company is leveraging its brand name recognition to push its products overseas, with the No. 1 share in Egypt, the Gulf States, Hong Kong, Malaysia, Panamá, Perú, Puerto Rico, Saudi Arabia, U.A.E., Bahrain, Oman, and Qatar.

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  Colgate Acquisition Increases Clorox's Global Presence

Clorox's acquisition of Colgate-Palmolive Company (CL)'s Canadian and Latin American bleach divisions in 2006 increased the company's global market presence and gave it exposure to the emerging middle classes of Latin America. The acquisition added at least $70 million in annual revenue and served as a springboard towards pushing a greater presence in emerging markets.

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4 votes

  High Dividend Yield

Clorox currently has an annualized dividend of $2.20, making its dividend yield 3.5%, one of the most competitive in the household products sector.

Its most recent declaration is for a dividend of $0.55 payable February 14, 2011 to shareholders of record on January 27.

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  Icahn discloses 9% stake, says Clorox is undervalued

Carl Icahn disclosed a 9.08% stake in Clorox in February 2011, saying the company is undervalued. Mr. Icahn purchased approximately 1 million shares and options to purchase another 11.5 million shares. If the options were to be exercised, Mr. Icahn would be Clorox's largest shareholder.

Deutsche Bank analyst Bill Schmitz said "there is a lot of value to create if you take the dogs out, those non-core businesses like Hidden Valley Ranch dressing or KC Masterpiece barbeque sauce."

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  Icahn discloses 9% stake, says Clorox undervalued

Carl Icahn disclosed a 9.08% stake in Clorox in February 2011, saying the company is undervalued. Mr. Icahn purchased approximately 1 million shares and options to purchase another 11.5 million shares. If the options were to be exercised, Mr. Icahn would be Clorox's largest shareholder.

Deutsche Bank analyst Bill Schmitz said "there is a lot of value to create if you take the dogs out, those non-core businesses like Hidden Valley Ranch dressing or KC Masterpiece barbeque sauce."

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  Clorox Dividend Yield at 3.5%

Clorox currently has an annualized dividend of $2.20, making its dividend yield 3.5%, one of the most competitive in the household products sector.

Its most recent declaration is for a dividend of $0.55 payable February 14, 2011 to shareholders of record on January 27.

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  H1N1 flu pandemic driving sales of face masks, hand sanitizers, and cleanser

Since H1N1, or swine flu, was identified in the US in April, sales of Clorox's face masks, hand sanitizers, and cleansers have risen due to stronger global demand. Clorox stands more than competitors to benefit from H1N1 since its home and laundry business, which includes bleach and wipes, accounts for 30% of sales. In contrast, if sales of face masks and other healthcare items rise 10% for Kimberly Clark, KMB would only see about 0.5% of increased profit, according to analysts.

For three consecutive quarters ending Dec 31, 2009, Clorox reported an increase in sales of disinfectant products driven by the global H1N1 pandemic. Analysts note that sales are already waning, which temper expectations going forward.

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  Clorox products are relatively recession-proof

Because Clorox manufactures products that are necessities in the household environment, the 2008-2009 recession is unlikely to put a severe dent on Clorox sales. In FY 2009, the company still had sales growth of 9% and raised its dividend by 15%.

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  Lower Commodities Costs amid slowing economy will boost profits

Price increases, coupled with lower commodities costs, increased Clorox's 2009 Q4 net income 7.6%. This quarter marked the first time in over two years that commodity costs were lower than the previous year's period. Clorox management has reported that commodity costs should remain "very favorable" in the latter half of 2009 and beyond.

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  opposing view to trade down reason in bear section

there is a opinion that clorox will lose sales from trade downs to store brands but in my personal experience i have tried most of the cheaper alternatives to the clorox products and found that they are cheaper on a shelf price but they are not as effective at cleaning

when you consider how much more of the cheaper brands you need to use to clean things you find that you end up paying the same or more to clean the same things so cheaper might be as a shelf price but if you must use more then you really do not save money so people that pay attention will trade back once they have the experience with failure in the cheaper brands and a trade down cycle will be a temporary issue

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