The Company has an authorized $3.6B stock repurchase plan (June 11, 2018). This buy back is being funded by the divestures of units not in line with management’s goals for a stream lined company (e.g. Rawlings). As of the end of Q2, there were 486.2M shares outstanding. At a price of $22/share management can repurchase 163.6M of the outstanding shares or ~34%. Assuming profits remain flat the result of these buy backs will be an increase to EPS of ~50%. Additionally, management is planning to reduce head count and are taking other cost cutting measures to increase profitability on a per share basis. Lastly, at current prices, NWL has a dividend yield over 4% which if reinvested will allow investors to lower their cost basis.
Hold your shares. Accumulate under $21. Ex divy date: 30 Aug; Divy: 23 cents paid on 14 Sep.
I have positions now in NWL. Brett Icahn bough 110,000 shares on 9 Aug 2018 at $21 in the open market.
Brett is son of famous Icahn. As a board member, I believe he sees at least a 15% upward movement in next 6 months - else would not be putting money.
Wall st selloff could be due to these reasons: (1) NWL marked as slow-growth stock. Take some money out and put on some fast growth stock like AMZN or BABA (2) NWL may no longer be viewed as Buy-Hold-And-Retire stock, despite its consistent divy. Because Retail is being replaced by AMZN . In other words, sellers are seeing in NWL what they saw in Sears 10 years ago. Shrink, more shrink, and more need for capital and more excuses ...
Reason number 1 is valid. Which is why value investors, with longer horizon are stepping in.
Reason number 2 is overblown. In my opinion. Sears is teetering towards BK not because of AMZN , but because of inept and indifferent management. Opposite case is WMT . They are fighting back the online giant. And I believe NWL management - with new board members - believe in operating a profitable company with super quality products for a long long time.
Lastly, the increased tarrifs - while stated in CC - is not bothering wall st . - the media just threw that in there to justify price decline.
"All of Newell’s main segments saw sales declines. Food & Appliances dropped almost 12% to $621 million; Home & Outdoor Living came in at $742 million, down 6.7% from the prior-year period; and Learnings & Development generated sales of $839 million, falling over 15% year-over-year."
On July 7, 2017 when Boston Beer Company, Sam Adams parent Company, was trading at $133/share Zacks labeled it the bear of the day. Fundamental traders hund in and just over 13 months later it is trading at $318 or an increase of 139%. This call by Zacks on NWL is at the wrong time. Negative sentiment is already baked in and with insiders buying as well as the stock buy back the stock has a lot of upside. Only time will tell but I am long at this price.
Newell Brands Inc (NWL)
? % ?
06.08.2018 0.82 0.78 +0.04 +5.13% 0.86
04.05.2018 0.34 0.26 +0.08 +30.77% 0.87
16.02.2018 0.68 0.67 +0. 01 +1.49% 0.34
02.11.2017 0.86 0.92 −0.06 −6.52% 0.80
04.08.2017 0.87 0.87 0 0% 0.78
08.05.2017 0.34 0.29 +0.05 +17.24%
06.02.2017 0.80 0.80 0 0%
28.10.2016 0.78 0.73 +0.05 +6.85%
29.07.2016 0.78 0.72 +0.06 +8.33%
29.04.2016 0. 40 0.37 +0.03 +8.11%