Timing is everything. This one we got wrong. This is what we have been expecting for quite a while now (see previous blogs). The whole thing would have ended with a wedge and a price of about $92. Clearly that is not how things turned out. It would have been unrealistic at the time to assume that this whole thing from the lows could actually take 4 to 5 years and another $18. However, in our defense, we did point this out as an alternative(see blog of Aug. 31, 2011) as in the (updated ) chart below.
Rather than a single wedge wave 5, this count anticipated a series of 4-5’s. The target (depending on the time) somewhere in the order of $100+. We are beyond that by about $9 which could simple be a usual “throw-over”. Comparing CL with the S&P500 clearly demonstrates the unusual “blue chip” behaviour of this stock;
This comparison covers the past 5 years, 2007 to the present. The S&P has done virtually nothing on balance over that period, down marginally by 4.61%. Colgate, on the other hand is up by 56.78% for an outperformance of 61.39% (nice Fibo #). Looking at it in comparison to one of its main competitor Unilever NV (UN),produces similar though smaller results;
Unilever shows an increase of 14.53%, but if you go back a little further in 2007 the stock is actually down by about 6%. Cl, as before is up 56.78% . Cl has a p/e near 21 and UN closer to 18. The stock is again a sell, and this time there is no clear alternative in sight.