Consumer staples have always been a feature in the 8% eco-system because the revenues are recurring, the businesses easy-to-understand and generate good cashflows and dividends.
We have discussed Reckitt (RKT) in the past. This post serves as an update with the following framework: review, update, value and decide. The stock has performed terribly since 2020 and while the substack portfolio added at the lows in 2023, we have not seen a strong recovery. The position today is slightly underwater.
Hence, this update today. Let's start with the review of the investment thesis.
1. Review Thesis
The following is the original thesis:
Reckitt is one of the strongest consumer staples companies in our times with best in class margins for OPM at 20-25% over the last 20 years and has generated consistent growth on the back of strong brands in strong categories.
R…
