Investors seem to love gaudy expense-reduction programs, and Procter & Gamble (NYSE:PG)
shares have certainly done better since Bill Ackman's Pershing Square
got involved and management announced a $10 billion cost-cutting
program. P&G's performance isn't so unusual in the wider context of a
hot market for consumer staple
stocks, but it's looking more and more like investors are overpaying
for the margin improvement potential and earnings consistency of these
names. Barring a quick turnaround in volumes, it looks like P&G
shares have overshot the mark and offer less compelling potential from
today's level.
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