Although the Dow closed last week on a record high PG, a member of the Dow, is the only folio stock that made no advances in any of the week's exuberant trading sessions. I've spent all weekend reading any business story or column that mentions PG but can't find any negative "publicly available" information. In fact PG insiders have been mostly purchasing stock over the past month. Also, none of the research or models I've seen suggests the stock is overvalued compared to its peers.
So I scratch my head. Then it hits me. It's the fourth quarter!
It's that time of the year, otherwise known as the holiday season, when Wall Street falls out of love with sectors like consumer staples and gets in bed with season blazers like tech, in particular, software stocks. Actually there have been some indications of this rotation out of staples. One has been short interest (SI), a bet that the price of a stock will fall going forward. In September the SI on PG was up 25% on the previous month. To be sure, PG is not alone. The SIs on other sector giants, namely Wal-Mart, Altria Group, PepsiCo and Coca Cola, were all up.
A more recent indicator has been the recent run-up in technology-heavy NASDAQ. After trailing the Dow and the S&P in gains for much of the year, the NASDAQ last week returned more than the other two indices combined.
So what is wrong with PG? Nothing really. In my opinion, it remains a solid stock with sound fundamentals, if you don't mind the sizable long-term debt on the balance sheet. It's just that time of the year. But, who cares? As long as I shave with Gillette am in it for the long-term with PG.
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