Nestle is Ok, But Not As Great As The Nespresso…

Nestle looks inexpensive from where it was a while ago, however if we dig deeper, it is still absolutely nothing special. The why is down is easily explained by taking a look at earnings, net income and the intense competition regardless of the famous brands. Plus, there is the debt.

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Nestle is Ok, But Not As Great As The Nespresso…

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33 Comments

    1. My largest winners this year were China and Gold. About 6 months ago the “experts” were talking about how China is a dead market and the risks are there, slowdown, all this. 6 months later: “Goldman raises forecasts for China stocks after Beijing’s stimulus pledge (07.10.2024). I chuckle at these changes of opinion.

    2. @@dodid0 Same. I watch Bloomberg Asia on youtube and they were groaning on about how the Chinese economy is in trouble then they do a presentation on how Ecommerce in China is growing at 9.75% per year and is projected to grow at that rate for the next five years and I’m just watching it and thinking that math doesn’t math.

  1. I’ve bought Nestlé when I started investing, because it was cheap and a big name, but the more I watched Buffett, the more I realized there’s an important thing missing.

    I’ve sold when I realised I don’t like the management.

  2. Great as always. Sven maybe it is time to look again at lithium stocks, they are all crushed except Arcadium that might be acquired.

  3. I guess you guys don’t know that Nestlé has 400,000 haters thread on Reddit. It’s named Nestlé crimes against humanity or something like that.

  4. I 💯 agree. A PE of 10 would be fair but with dividend yeild of 3.6%, it might only go down to 15.

    1. Yes since it’s a well known stable business, it’s less likely to be undervalued by the market. That’s why it’s only worth buying during a big crash or panic by the market. Like Sven said, maybe once in 20 years

  5. Great video Sven! Thanks for sharing your thoughts. Would be amazing if you can do same valuation for magnificent 7 too.

  6. Sven do u think about wegovy and ozempic long term impact on food and beverage producers?
    always wanted to buy Coca Cola for pe of 15 but now with these carving/appetite depressors, not so sure anymore.
    any thoughts?

    1. I know you didn’t ask me, but I don’t think a future where everyone is drugged up on GLP-1 is realistic, or even possible. Something about the drug will break at that scale. But if not, then why not buy Coca Cola and add just a little bit of NVO as a hedge, because if GLP-1 is going to blow up globally to that scale, your NVO investment will cover your losses.

  7. Nice video Sven, i agree it seems to be a bit overvalued still. It has decent products but the way i see it expanding won’t really happen anytime soon, since there is also a lot of competition there and nobody really looks at Nestle and sais its a brand they must buy like Coca Cola, at least where i live.
    Lately i’ve stumbled upon a dutch bank being super weirdly valued called ABN Amro. I’ve been thinking about entering the position, but i don’t know what are the possible traps of entering into banking sector. I mostly deal with manufactoring companies, but the ABM seems like a good oportunity now for a somewhat stable long term dividend yielding position. What is your outlook on the thing?

  8. Nice video and I agree about Nestle. What about a.s.r. Nederland, a dutch insurer. Very good shareholder yield (7% dividend yield + 5-10% dividend growth until ’26, buybacks), growing organic capital creation/generation. Price seems good to me, would be fun to hear your take on such a company.

  9. You also have to take into account the interest rate in swizerland, it is 1% and trending down. The equity risk premium of a 20 P/E company in the swiss market is still better than a 15 P/E in the US market.(even if US rates go down to 2.7% which i doubt) Also swiss macro- franc getting stronger even with lower rates, good export economy and no inflation. Opposite than the US. IMO if you can buy on margin with franc its a much better buy.

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