Consumer stocks are now as risky as they've ever been.
Unemployment's historically high, consumers are spooked, and
subpar earnings abound, as companies pay the price for lost
competitive advantage or fiscal irresponsibility. But tough
times can offer investors
the best chance to buy stocks.
Even if stock prices are low, investors still need to be
careful. Many companies simply won't survive the recession in
their current form. And even if you love an investment, it's
always Foolish to play devil's advocate, probing for its
potential weak spots. To keep you and your portfolio ready
for anything, I've highlighted two reasons to loathe consumer
staples company
Colgate-Palmolive (NYSE: CL).
Pricy vs. peers
I've previously
sung the praisesof this well-known company, which markets
brands such as Irish Spring, Speed Stick, Murphy's Oil Soap,
and Palmolive dishwashing products. Now, I'm scouring away
the bright spots, looking for vulnerabilities worthy of
investor loathing.
What emerges after just a few swipes of steel wool
concerns the stock more than the company: Shares are no
bargain. Let's check out the peer-comparisons below to see
exactly what I mean.
Company
 Share Price
Current-year P/E *
PEG Ratio
Price-to-Sales Ratio
Colgate-Palmolive
$75.68
17.7
1.8
2.6 Continued... |