(B)(N) KMB Kimberly-Clark Corporation

Drama. Kimberly-Clark has been in our portfolio and in our cabinets for so long that we’ve almost forgotten that it’s there since much lower prices of $50 four years ago. Apparently nine major Wall Street firms rate the company as a hold (6) or a sell (3) but nobody wants to buy it and they think that it’s “overvalued” with a [P/E] of 22× or yield of 5% (The Street, November 15, 2013, Jim Cramer: The Indefatigable Kimberly-Clark).

What’s she listening to?

Oh well. Good luck to them. We’re just going to check our stop/losses and maybe buy some puts for extra profits in case somebody is listening to them.

The company will pay a dividend of $1.2 billion to its shareholders this year for a current yield of 2.9% in addition to its stock price gains of +30% so far this year. This is outrageous and unheard of on Wall Street. Too much money for the shareholders.

Our estimate of the downside in the stock price due to the demonstrated volatility is minus ($7.50) so that it could be trading off the current price of $109 between $102 and $116 without surprise. But we know how to deal with surprise – it’s a buying opportunity if still above the “price of risk” which we currently estimate as the Risk Price (SF) of $72 and rising. That’s quite a gap. The December puts at $105 are still available at $0.85 per share and we could sell one share and take some profits or use our dividends to protect the price of the other ninety-nine above $105 for the next month and wait for more information. Let’s hear it now for “volatility” and more anxious reports from Wall Street.

Exhibit 1: (B)(N) KMB Kimberly-Clark Corporation – Risk Price Chart

(B)(N) KMB Kimberly-Clark Corporation

Kimberly Clark Corporation is engaged in the manufacturing & marketing of products made from natural or synthetic fibers using technologies in fibers, nonwovens and absorbency. It has four segments: Analog, Embedded Processing, Wireless and Other.

(Please Click on the Chart to make it larger if required.)

From the Company: Kimberly-Clark Corporation, together with its subsidiaries, manufactures and markets personal care, consumer tissue, and health care products worldwide. The company operates in four segments: Personal Care, Consumer Tissue, K-C Professional, and Health Care. The Personal Care segment offers disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, and related products under the Huggies, Pull-Ups, Little Swimmers, GoodNites, Kotex, Depend, Plenitud, and Poise brand names. The Consumer Tissue segment provides facial and bathroom tissue, paper towels, napkins, and related products under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Hakle, and Page brands. The K-C Professional segment offers apparel, wipers, soaps, sanitizers, tissues, and towels under the Kleenex, Scott, WypAll, Kimtech, and Jackson Safety brand names. The Health Care segment provides surgical and infection prevention products; and medical devices focused on pain management, respiratory, and digestive health under the Kimberly-Clark and ON-Q brands. The company sells its products for household use directly to supermarkets, mass merchandisers, drugstores, warehouse clubs, variety and department stores, and other retail outlets, as well as through other distributors and e-commerce; and away-from-home use products through distributors and directly to manufacturing, lodging, office building, food service, health care establishments, and public facilities. Kimberly-Clark Corporation was founded in 1872, has 58,000 employees and is headquartered in Dallas, Texas.

For more information and additional references to the theory, please see our recent Post, The RiskWerk Company Glossary.

And for more on what risk averse investing has done for us this year, please see our recent Posts on The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class action, La Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100.

And for more on what’s Working in America, Big Oil, Shopping in America or Banking in America, to name just a few.

Postscript

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Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.