What happened
Shares of Procter & Gamble (PG 0.60%) rose 10.8% in November, according to data from S&P Global Market Intelligence, as the consumer products giant benefited from a bullish outlook on its position in the market.
Because it trafficks in a broad range of consumer essentials with some of the best-known brands on the market -- everything from Crest toothpaste to Pampers diapers -- it is seen as a defensive play in an uncertain market.
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So what
Billionaire investor Nelson Peltz revealed that his Trian Fund had increased its stake in Procter & Gamble, though not by any significant size. Where it had previously owned 5,457 shares worth $785,000 -- Peltz's smallest holding -- the fund now owned 5,589 shares worth $706,000.
Procter & Gamble's stock had fallen from a 52-week high of $165 per share back in May to a low of $122 per share in October, a 26% drop. It might have seemed opportune for Peltz, who sits on P&G's board.
Analysts were subsequently buoyed by the investor day Procter & Gamble held in the middle of the month, during which the consumer products leader said it was focused on driving growth and value. Because its products are popular, everyday-use items, consumers make plenty of repeat purchases.
From an operational standpoint, president and CEO Jon Moeller said that the company has narrowed its focus to just 10 categories, a move that concentrates on products that are growing faster and are more profitable than those it previously sold.
Now what
Wall Street analysts were already becoming more bullish about P&G before the investor day presentation, with firms like Credit Suisse and Wells Fargo raising their price targets. Afterward, others joined in, including Wolfe Research and Jefferies, which boosted their targets as well.
Although the possibility that inflation-strapped consumers will choose to go downmarket for their everyday essentials, Procter & Gamble's stable of products provides a level of assurance based on their quality and performance. Wolfe Research views P&G's global footprint -- some 70% of its revenue comes from markets outside the U.S. -- as a strong defensive position.
Procter & Gamble has paid a dividend to investors for more than 130 years, a record few companies can match, and it has raised the payout for more than 60 years, making it a Dividend King.
