This column was originally published on RealMoney on Aug. 1 at 11:51 a.m. EDT.
We are on the eve of the next big move in
Procter & Gamble
, the one that comes after the closing of the
deal, and people are selling now? Because the company was candid about raw costs not done coming down yet? Because emerging markets aren't able to double every year because the business gets too big? Because they are bored with the best story out there?
I think it is important when a company like Procter explains its global domination through research and technology spending -- that's what they do -- that investors understand why this story isn't "finished" and it isn't time to jump ship for
. This isn't
getting too far ahead of
so now we have to switch from Kellogg to Mills. This is just another quarter on the way to PG being in charge of its own fate, vs. the
As soon as PG sells some tooth care products, that deal's going to close. When it does, PG will take some of that gigantic cash flow and begin repurchasing stock and boosting dividends as well as putting up huge numbers because of the massively synergistic nature of the PG-G deal. You leave now, you screw yourself.
But go ahead. Go buy some Colgate. See how that does. Go bet on
or Avon or
. Remember, though, PG spends more on research than
of those companies combined, so don't expect an immediate defeat of the Cincinnati Colossus.
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