Stock Alert for Nestle SA (NSRGY)

Nestle SA (OTCPK: NSRGY)

Nestle SA (NSRGY) is a Swiss company engaged in the nutrition, health and wellness sectors. It is the holding company of the Nestle Group, which comprises subsidiaries, associated companies and joint ventures throughout the world. It has such business units as Food and Beverage, Nestle Waters and Nestle Nutrition. It is also active in the pharmaceutical sector.  The Company divides its products into nine categories: Prepared dishes and cooking aids, Beverages, Confectionery, Ice cream, Water, PetCare, Milk products, Nutrition and Pharma. It has numerous subsidiaries engaged in various areas of activity, including Alcon Ophthalmika GmbH (Austria), Alcon Bulgaria EOOD (Bulgaria) and Galderma Laboratorium GmbH (Germany) for pharmaceuticals; Novartis Nutrition GmbH (Austria) and Hjem-IS A/S (Denmark) for food and beverages; and Galderma International SAS (France) and Galderma Laboratorium GmbH (Germany) for health and beauty activities.  In July 2008, Novartis AG acquired a 25% stake in Alcon Inc. from the Company.  In March 2010, the Company acquired Kraft Foods Inc.’s frozen pizza business.

NSRGY is headquartered in Vevey, Switzerland.

Share Statistics (8-June-10) FY

2008

FY

2009

%

Chg

Q4 2008 Q4 2009 %

Chg

Symbol NSRGY Revenue, $Mn n/a n/a n/a n/a n/a n/a
Current price $46.65 Gross marg. n/a n/a n/a n/a n/a n/a
52wk Range: 35.27-51.63 Oper. margin n/a n/a n/a n/a n/a n/a
Avg Vol (3m): 572,048 Net margin n/a n/a n/a n/a n/a n/a
Market Cap. 179.2B
Shares Outstanding 3.83B EPS, $ n/a n/a n/a n/a n/a n/a

Source: Reuters.com, SEC Filings.

Financial Summary

Financial Strength (08-June-2010) Company Industry Sector S&P 500
Quick Ratio (MRQ) 1.01 0.80 0.81
Current Ratio (MRQ) 1.37 1.08 0.97
LT Debt to Equity (MRQ) 24.62 26.96 132.66
Total Debt to Equity (MRQ) 39.44 40.97 197.79
Interest Coverage (TTM) 0.38 0.58 42.06

Source: Reuters.com, SEC Filings.

Analyst Consensus

Buy Outperform Hold Underperform Sell No Opinion

This is the consensus forecast amongst 31 polled investment analysts. Against the Nestle SA company.

Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
Latest 12 12 7 0 0 0
4 weeks ago 12 12 7 0 0 0
2 months ago 15 10 5 1 0 0
3 months ago 15 10 5 1 0 0
Last year 12 6 12 2 0 0

The 26 analysts offering 12-month price targets for NSRGY have a median target of 59.75, with a high estimate of 65.00 and a low estimate of 51.00. The median estimate represents a 11.47% increase from the last price of 53.60.

Source: www.ft.com

Consensus Estimates Analysis


# of Estimates Mean High Low 1 Year Ago
SALES (in millions)
Year Ending Dec-10 1 100,083.00 100,083.00 100,083.00 95,670.10
Year Ending Dec-11 1 107,213.00 107,213.00 107,213.00 101,295.00
EARNINGS (per share)
Year Ending Dec-10 2 3.13 3.23 3.02 2.67
Year Ending Dec-11 2 3.40 3.57 3.23
LT Growth Rate (%) 1 6.91 6.91 6.91 -0.80

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=NSRGY.PK

Investment Highlights

NSRGY, with headquarters in Vevey, Switzerland, was founded in 1866 by Henri Nestlé and is today the world’s leading nutrition, health and wellness company. Sales for 2009 were CHF (Swiss franc) 108 billion. The Company employs around 280,000 people and has factories or operations in almost every country in the world.

Nestle in the United States consists of five main businesses: Nestle USA, Nestle Waters North America, Nestle Purina PetCare Company, Nestle Nutrition and Nestle Professional. Together, these companies operate in more than 120 locations in 47 states and employ over 44,000 people. It is NSRGY’s largest market with combined product sales in the United States totaling more than $28 billion in 2009. Committed to becoming the very best nutrition, health and wellness company, Nestle in the United States sells some of the world’s best-known brands and products seen every day, and that families have come to enjoy and rely on for years. Key brands include LEAN CUISINE®, NESTLE® TOLL HOUSE®, POWERBAR®, NESTLE® PURE LIFE®, POLAND SPRING®, GERBER®, and PURINA ONE®.

NSRGY believes it must manage its operations in a manner to comply with the highest standards of business practice and environmental sustainability. However, the Company believes that to build a profitable business for its shareholders, its must go beyond compliance and sustainability to a third level: creating long-term value for both society and for its shareholders.  The Company thus established the concept of Creating Shared Value:

-using its core business strategies and operations to create value for shareholders;

-serving consumers and the public by offering them nutritious products that are both enjoyable and contribute to their health and well-being;

-seeking to improve the economic and social conditions for people and communities across its entire value chain – for farmers who supply the Company raw ingredients, for communities where its factories are located, for suppliers who work with the Company and for its trade partners.

Last month, NSRGY’s five operating companies that comprise Nestle in the United States released their first-ever report detailing the success of Creating Shared Value in the United States. “We have the privilege of being the largest market of the world’s largest food and beverage company,” said Heidi Paul, vice president, Corporate Affairs, Nestle Waters North America. “With that privilege comes an opportunity – and a responsibility – to engage our consumers and the communities where we do business. Creating Shared Value is that offering and is fundamental to our continued success.”

Nestle’s Creating Shared Value in the United States highlights: (1) Helping Communities Grow By Generating Economic Vitality; (2) Offering Nutritious, Great-Tasting Food and Beverages; Providing Health and Nutrition Information; (3) Conducting Business in an Environmentally Responsible Way; and (4) Engaging Local Communities.  To view the full report, please go to: http://www.Nestleusa.com/PubNews/FactSheets.aspx and select the “Nestle in the United States Creating Shared Value Report.”

Technical Analysis

Source: http://stockcharts.com

NSRGY is trading above its 13-day moving average. While this is normally considered to be a bullish sign, the moving average is downward sloping which means that investors have been liquidating shares during this time period and tempers the bullishness of the signal.

NSRGY is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

NSRGY’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below zero, which suggests that the underlying moving averages are bearish.

Comparative Analysis

Company Name Ticker Price per Mrkt. Cap. P/E P/S
June08-2010 symbol Share, $ $ Mn 2010 2011 2010 2011
The Hershey Co. HSY 50.47 11,470 20.11 18.76 2.03 1.95
H.J. Heinz Co. HNZ 44.81 14,170 14.69 13.54 1.34 1.29
Kraft Foods Inc. KFT 28.64 49,930 14.11 12.34 1.01 0.96
Kellogg Co. K 54.35 20,690 15.18 13.84 1.60 1.55
Median 14.94 13.69 1.47 1.42
Nestle SA NSRGY 46.65 179,200 n/a n/a n/a n/a

Source: Thomson Financial

Insider Trading Activity

NET SHARES PURCHASE ACTIVITY

Inside Purchases – Last 6 Months

Shares Transaction
Purchases n/a n/a
Sales n/a n/a
Net Shares Purchased (Sold) n/a n/a
Total Insider Shares Held n/a n/a
% Net Shares Purchased (Sold) n/a n/a

Net Institutional Purchases — Prior Qtr to Latest Qtr
Shares
Net Shares Purchased (Sold) n/a
% Change in Institutional Shares Held n/a

Source: Yahoo Finance

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