Clorox continues to brighten portfolios

If recent market turbulence has dented your investment confidence, or if you're concerned about a continued U.S. economic slowdown heading into 2008, consider purchasing Clorox's shares.

Look for The Clorox Company (NYSE: CLX) to keep rolling along. Or, put another way, when will bleach use go out-of-style?

The world's best-known bleach brand has further impressed investors with its lesser-known, but profitable operations: Specialty Group [cat liter, charcoal products, dressings and sauces, Glad brand bags/containers], along with its International Group, which sell products in Latin America and Asia that are similar to those in North America.

What's more, bleach remains a key revenue driver, but in fiscal 2007 Glad trash bags accounted for 14% of revenue, Clorox about 12%.

The risks? Analysts have their eye on rising commodity costs, but CLX's cost cutting programs and pricing power should more than compensate for that concern, in the immediate years ahead. That fact, combined with the company's demonstrated proficiency in marketing, make CLX a low-risk investment. CLX's p/e of 19 is not low, but it's reasonable given its growth prospects and the amount safety the company affords.

The Reuters F2008/F2009 EPS consensus estimates for CLX are $3.40 to $3.99.

The First Call mean rating for CLX is: Hold. [15 firms.] Mean 2007 target: $67.40. [high: $78, low: $58.]

Stock Analysis: Clorox is a low-risk stock. Consider buying Clorox's shares if your portfolio needs a consumer defensive stock. Investors with an investment horizon longer than 1 year should be rewarded from CLX's shares. Sell / Stop Loss if you were to purchase shares of this company: $44.