Investment Strategies / Mechanical Investing
No. of Recommendations: 1
...again is lower than at any point during the last 3.5 years (apart from around the beginning of this year).
But in the meantime there is a bonus point: It's Swiss, not US 😉
No. of Recommendations: 3
It's doing great in US dollars!
I bought on Dec 27 at $82.61 and today it's $98.10 for a gain of 18.75%.
Let me enjoy my imaginary gains, I don't want to know how far the USD has fallen since then (9.8%). 18.75% means I am Buffett, 8.75% (1.1875/1.098-1) means I just got lucky.
No. of Recommendations: 6
I suggest to again have a look at Nestle. Not in USD, but in it's home currency, CHF. Fallen so much that they are now nearly exactly where they were 10 years ago. 3.5% dividend, super stable dividend history, one of the rare "forever" companies you never get cheap --- but currently far more reasonabley priced than since a long time. Why? Because they are having problems. But for me one of the few companies I am waiting for such, so that thrifty me gets a buying opportunity.
No. of Recommendations: 0
Btw: Cheap measured on both, it's own P/E and it's P/S history.
Irrelevant of course should their problems worsen; otherwise an entry opportunity (which I used, for a small first tranche).
No. of Recommendations: 2
I am very bearish on food brands - they are losing market share to house brands as well as locally produced items; I see this trend accelerating over time.
tecmo
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No. of Recommendations: 2
Not just Nestle. Many top food and beverage companies fallen a lot in the post Covid years, struggling to deal with inflation and shortages. And also the increasing market power of Walmart, Costco, Amazon, Aldi etc.
Pepsi, Kraft, Hershey, Diageo, Constellation Brands, all at 4-5 year lows.
No. of Recommendations: 1
House brands eating name brands is a US phenomenon. Nestle and UniLever are global companies. 65% of Nestle revenues are from outside the US. Probably > 80% of Unilever revenues are non-US (hard to compute exactly, but Unilever says 35% for US+China+India and 44% developed markets).
No. of Recommendations: 2
65% of Nestle revenues are from outside the US.
So that means 35% of their revenue is at risk to house brands; doesn't seem like a great position to be in.
tecmo
...
No. of Recommendations: 3
Pepsi, Kraft, Hershey, Diageo, Constellation Brands, all at 4-5 year lows.
Nestlé is far more than just food for humans. Anyone here into cats or dogs? Nearly no way around Nestlé. Still available for the same price as 10 years ago.
Anyone here who would love to buy Costco if it falls a lot? If so I suggest to have a look at a Nestlé 25 year or longer chart: It NEVER falls - apart from the last 3 years. You can put a linear to it and it perfectly fits. Berkshire is a super volatile speculative investment compared to Nestlé.
No. of Recommendations: 4
Having a look at free cashflow generation it's similar to what it was 15 years ago. I wonder perhaps if the market is pricing in the low growth and the PE is drifting down to 15 x PE which would be a price of 60 vs the current 73 Swiss.
No. of Recommendations: 18
Nestlé is far more than just food for humans. Anyone here into cats or dogs? Nearly no way around Nestlé. Still available for the same price as 10 years ago.
Anyone here who would love to buy Costco if it falls a lot? If so I suggest to have a look at a Nestlé 25 year or longer chart: It NEVER falls - apart from the last 3 years. You can put a linear to it and it perfectly fits. Berkshire is a super volatile speculative investment compared to Nestlé.
I agree with all you say about Nestle, and I've respected them hugely and wanted to own it for a long time. But the problem is that they really have not prospered for quite a few years now. So, the investment case rests on the assumption that the rut is transient. Five years of flat revenue and rising debt and sputtering profitability, at a glance. Payout ratio around 80%, so one more modest mis-step and there's a dividend cut on the horizon, which won't be good for the stock price for some time given the sort of folks who likely own it. All of those worries could be forgiven if it were dirt cheap, but it doesn't seem to be. Not expensive, but it's cheap mainly only in comparison to its own past when the business was doing better.
Maybe there will be a market swoon at some point and it will move from "cheaper than usual" to "actually cheap", and the worries will be covered by the margin of safety.
Jim
No. of Recommendations: 1
the investment case rests on the assumption that the rut is transient.
...... it's cheap mainly only in comparison to its own past when the business was doing better.
I fully agree. There are good reasons why it´s cheap (measured on it´s own past). But that´s the whole point of a "falling knife", isn´t it? That you catch it only when you think a great company has temporary problems they get to grips (as it once was the case e.g. with Coke if I remember correctly). I have enough trust in Nestlé do believe they do and will continue to be a great company.
No. of Recommendations: 1
While I love their products and admire Swiss culture/business, I have a problem with Nestle's method for acquiring spring water rights for their bottled water. I am given to understand that indigenous peoples lose the right to spring water on their own land and have to travel on foot to other sources.
No. of Recommendations: 3
I didn't know that, but it reminds me on the ethical problems I already had with Nestlé at least in the past because of them having fed cats by purpose overweight for their product studies.
Said, cat lover.
No. of Recommendations: 2
...and then there's the whole baby formula issues, which admittedly are ancient, but have me backing off buying the company's products or stock.
IP
No. of Recommendations: 6
I have enough trust in Nestlé do believe they do and will continue to be a great company.
That has traditionally been my view. They didn't become the world's biggest food company by being bunglers, historically. I have been extremely impressed with their long term view on many things.
But the stumbles are hard to ignore. How many CEO's have they had in the last couple of years? Four now?
More importantly, it is very hard to distinguish between cyclical trouble and end-of-an-era trouble.
Jim
No. of Recommendations: 0
I've never invested in them and wasn't aware of all of the controversies with them. There is a brief article covering several of them
https://utopia.org/guide/crime-controversy-nestles... And now
Nestlé investors are reportedly calling for chair Paul Bulcke to step down immediately, holding him responsible for a period of turmoil at the Swiss food giant after the exit of two chief executives in just over a year, the Financial Times reported. https://www.storyboard18.com/brand-makers/nestle-i... Interesting my searching came across someone who was Chairman and Managing director of Nestle India who seemed to have a good approach to leadership which doesn't seem to match what I've seen in my brief look at Nestle. He said
His message was clear: great leadership is less about power and more about people. "In a crisis, you don't run a company, you serve a family," he said, defining his leadership philosophy with unflinching clarity.
https://www.storyboard18.com/brand-makers/in-a-cri...Anyhow I have no money in Nestle and I doubt I would since I don't know much about them.
Good luck
Rich
No. of Recommendations: 16
NZZ (Neue Zürcher Zeitung) Interview with Peter Brabeck-Lethmathe, who worked 61 years at Nestlé, was CEO from 1997 to 2008(CEO), from 2005 to 2017 Chairman of the Board of Directors. Following the resignation of Klaus Schwab as Chairman of the World Economic Forum (WEF), he served as Vice Chairman and interim head of the WEF from April to August 2025.
In the early 2000s, it became clear to me that the century-old paradigm of the food industry—producing as many calories as possible, as cheaply as possible—was reaching its limits. We had to move away from food and beverages and toward a holistic approach to nutrition, health, and wellness—nutrition not only as sustenance, but as a contribution to a better life. This reorientation was a highlight for me. So I am somewhat disillusioned to see Nestlé returning to its old ways. The sale of divisions such as skin care and medical nutrition has sent a clear signal: back to food and beverages. I regret that very much.
You joined Nestlé in 1968, and now you are stepping down as Chairman Emeritus. Was that a difficult decision?
Of course, almost sixty years in a company leave their mark on everyone. I was very closely connected to the company. But there are some things that have happened in the past that I can no longer identify with. I also see that my advice is not needed. Since I stepped down as Chairman of the Board of Directors in 2017, the Board has not once asked me for my opinion as Honorary Chairman.
Not even out of courtesy?
Not once. Perhaps they didn't ask me in part because they knew exactly what my opinion would be – for example, on the return to food and beverage. The same applies to the sale of Nestlé Skin Health, which is now listed on the stock exchange as Galderma. I was convinced of the deal. And when I look at how much Galderma is worth today, I wasn't so wrong. But I was never asked about that either, probably for purely personal reasons. Then there's the financial policy: I handed over the company with more than CHF 40 billion in capital and CHF 12.3 billion in debt. Now the company has over CHF 60 billion in debt – and for nothing, just to buy back shares. That was the typical influence of the financial markets. In my opinion, the chairman and the board of directors should ensure that no decisions are made that weaken the company in the long term.
No. of Recommendations: 20
Whenever former managers like Peter Brabeck make negative comments about their company, one should look at the cold, hard facts.
Fact 1: The decline of Nestlé began with the appointment of Ulf Mark Schneider as CEO at the end of 2016. The person responsible for this appointment: the outgoing Chairman of the Board, Peter Brabeck. Ulf Mark Schneider embarked on a massive shopping spree that increased Nestlé’s debt from CHF 23 billion to CHF 63 billion. Meanwhile, revenue stagnated at around 90 billion. In 2024, Schneider was removed in an emergency move by Brabeck’s successor.
Fact 2: Schneider was replaced by Laurent Freixe, an old buddy of Brabeck’s. According to the Code of Conduct, Freixe should no longer have been working at Nestlé at all, as he had a relationship with a direct subordinate while in a senior management position. It would have been up to Brabeck to dismiss his buddy. Unfortunately, as CEO, Freixe did exactly the same thing again: instead of focusing on getting Nestlé back on track, he entered into another relationship with a direct subordinate and clumsily promoted her to Marketing Chief of South America (even though she spoke neither Spanish nor Portuguese). He was fired. The reputational damage was substantial.
Fact 3: For years, Nestlé has been completely bureaucratic, immobile, and complacent. Since Nespresso, there has been almost no major breakthrough. Only now, with the appointment of Philipp Navratil, is momentum returning to a company that was poorly managed for a long time—not least under and because of Peter Brabeck. Whether the company achieves a turnaround remains to be seen in two to three years. One could certainly view Brabeck’s criticism of his former firm as a positive indicator.
Full Disclosure: I was invested in Nestlé from 1991 to 2022; it was my second-largest position.
No. of Recommendations: 7
Nestlé released its full-year results today. I believe their turnaround is well underway. They achieved organic sales growth of 3.5%, which is respectable. I also like that the new CEO is restructuring aggressively and implementing a culture of performance and accountability.
ROE is high (above 30%), but ROCE remains depressed as the balance sheet is highly leveraged (due to debt accumulated since 2016). They offer a dividend yield of 3.x% (in Swiss Francs!) and a forward P/E below 20, which is historically low for Nestlé. In my opinion, the turnaround is not fully accomplished yet, but I am willing to dip a toe in the water. Not a screaming buy, but could become a solid core holding again.
https://www.nestle.com/sites/default/files/2026-02...
