Consumer products giant Procter & Gamble (PG) announced today that chief executive A.G. Lafley would be stepping down in January after nine years at the helm.
It’s been an interesting ride for Lafley, who took the helm of PG when the corporation was struggling to turn a profit and shares were free-falling. Lafley helped turn around Procter & Gamble by innovating new products and spending more time focusing on consumer habits and needs. The blockbuster buyout of Gillette came underLafley’s watch, as did the growth of key brands like Pampers diapers and Pantene hair care products.
Unforuntately, the last 12 months have really taken a toll on PG stock. While share prices are finally back to where they were at the end of 2008, the company is struggling to outperform the market or grow sales. Even though it has recognizable consumer brands, revenue and profits have been anything but impressive. Procter & Gamble has come a long way under Lafley’s leadership, but securing the future growth of this company is no easy task.
In my opinion, Procter & Gamble is a bad investment right now — but not really because of Lafley or his departure from the company. My current fundamental analysis indicates PG doesn’t quite have what it takes and is struggling to grow profits and revenue despite some of the most iconic consumer brands around. Though the broader economy is picking up, this company seems to be going nowhere, so steer clear of PG stock.
Procter & Gamble is one of 13 Dow components that are really hurting right now. Click here for my complete list of 13 Dow stocks to sell right now.
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