Behind Clorox’s amazing run this year

clorox bleach

I never really noticed the role of bleach in my life. I used to think that bleach was an old product, something that my parents used, but that now there are better products to replace it. Recently, I realized bleach is still very prevalent and gaining ground globally.

Clorox Bleach is efficient, effective, and has withstood the test of time. Originally, I invested in Clorox (CLX) because of its potential all-weather performance, as turbulence was on the horizon. But since the beginning of the year the stock is up about 15% (through March 5).

CLX Chart

CLX data by YCharts

Once I started looking, I found bleach in many corners of my life. A few weeks ago, my friend was recovering from a viral sickness and offered me a shelf he was no longer using. I decided to use this shelf for toiletries and needed a way to disinfect it. I found a spray bottle and some bleach and all was well.

After working out on a mat, I had to clean up my sweat for the next user. When asking one of the trainers at the gym what they would like me to use, they pointed to a bottle of bleach and some paper towels.

While hiking, I carry a small bottle of bleach to disinfect water in a pinch and make it drinkable. Bleach is still as relevant today as it was during generations past. There will always be a need to clean things, and when it comes to general purpose disinfectants, it seems to me that bleach is king.

Clorox is well-known for manufacturing bleach and has been around seemingly forever – 2013 marks its centennial. The company’s latest earnings results beat Wall Street expectations on both EPS and revenue.

In the past 5 years, Clorox has doubled its dividend per share with an annual dividend growth rate of 13.3%. Dividends have increased every year since 1977, and the company has repurchased 40% of outstanding shares in the last 7 years.

All these signs indicate to me that Clorox is dedicated to long term growth and stability, but its recent move in these first few weeks of 2013 makes me wonder how much upside is left in the remainder of the year.

Image: dno1967b

The investments discussed are held in client accounts as of March 1, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.

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Jonathan Wee
Jonathan Wee
I’m a growth investor with a long-term view on macroeconomic trends. As a systems engineer, I use processes and tools that reduce the risk in complex projects to create better products for customers. I bring this same approach to my investments. Poor or risky decisions make investing a nightmare. That is why I want to increase the transparency so lacking in typical mutual funds with regard to research, watch lists, trade decisions and portfolio performance. By publishing these findings, we can improve our investment strategies together.