Owners of Clorox should have no complaints about the price performance this year. In this chart, above, you can see the breakout to new highs in late July and early August. CLX did feel the gravity of the rest of the market in late August, but notice how prices held up reasonably well in the $110 to $105 support area. After some choppy action through mid-September, prices are again on an upward trajectory.
In this longer-term view of CLX, above, we can see how prices have stayed above the rising 40-week (200-day) Moving Average. In the lower panel, we can see a rising Moving Average Convergence Divergence (MACD) oscillator. This is a positive signal from the MACD. The short-term view of CLX is positive, and so is this longer view. Where might prices go?
This Point and Figure chart, above, only looks at price reversals and ignores time and volume. Long-term price targets from this kind of chart come from projecting the width of the price action to the upside. The price target for CLX using this chart measures to the low $140s. Not bad for a name in the pantry.
Separately, TheStreet Ratings team rates CLOROX CO/DE as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate CLOROX CO/DE (CLX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.1%. Since the same quarter one year prior, revenues slightly increased by 4.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- CLOROX CO/DE has improved earnings per share by 10.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CLOROX CO/DE increased its bottom line by earning $4.59 versus $4.39 in the prior year. This year, the market expects an improvement in earnings ($4.82 versus $4.59).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Products industry. The net income increased by 12.4% when compared to the same quarter one year prior, going from $170.00 million to $191.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Products industry and the overall market, CLOROX CO/DE's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: CLX