Replies to post #28556 on The Rising Influence of Rising Affluence

[DewDiligence]

Thanks for your KVUE feedback. The P/E, based on the company’s 2023 non-GAAP EPS guidance of $1.26-1.31, is 17.5-18x — high, but not exorbitant, for a reliable company in a non-cyclical sector of the economy.

I’m impressed with the backgrounds of the CEO and CFO, which include extensive international experience. (~50% of KVUE’s sales are ex-US.)

I listened to KVUE’s 2Q23 CC (its first CC ever) and thought the amount of disclosure was helpful. (Nobody on the CC asked about the ex-US talc liabilities; the sell-side analysts presumably didn’t want to get off on the wrong foot, LOL.)

I’m considering taking a position after a bit more DD.

[DewDiligence]

Re: KVUE’s talc liability

…some risk in talc lawsuits outside US.

After thinking this through, I’ve come to the opinion that KVUE’s talc-litigation risk (which excludes cases in the US and Canada, where JNJ is on the hook) is actually quite small.

One reason why damage awards from consumer-product litigation are so high in the US is that US plaintiffs have the right to request a jury trial. However, this is not the case in many countries of the world, where a judge or magistrate rules on the merits of such cases.

Moreover, even in other countries where jury trials are permitted, these countries do not allow plaintiffs the kind of district “shopping” that occurs in the US, where plaintiffs seek out the friendliest venue in which to try their cases.

All told, these legal differences between the US and most other countries are hugely consequential, IMO.

[santafe2]

While I'm still out of the market now that treasuries / CDs, etc. are paying so well, UL is one of my standard bond-like holdings in my retirement account.