Inflation has been all over the news in the last few weeks. In my opinion there’s no denying anymore in the fact that prices are about to rise and that we will start to feel it more and more in our wallets.
But don’t be worried though, because investing in equities and especially stocks might just be the best hedge out there.
That’s why I have chosen the topic of inflation in today’s show of Sunday with eDGI.
I’m showing why the general inflation numbers from Europe are not the same as how it potentially impacts the companies in our portfolio’s.
After that I’m using Kimberly Clark as an example to show where it impacts a company by looking at the financial statements.
And off course, I then also use this opportunity to provide a fair value analysis for the company. This should answer us if the share price decline last Friday was indeed justified.
Enjoy the video and feel free to ask me any question you might have. I might address it in one of the upcoming videos.
- 0:00 – Intro
- 1:17 – Where does inflation come from
- 3:13 – Why CPI is not a good reference for individual portfolio holdings
- 5:44 – Companies announcing price increases | Inflation vs Interest Rates
- 10:35 – A look into Kimberly Clark
- 11:25 – A look into their sales numbers
- 13:09 – Inflation impacting earnings?
- 14:08 – Operating working capital is key in $KMB numbers
- 18:45 – General metrics for $KMB
- 19:53 – Why is their Debt/Equity so high?
- 22:20 – Fair value estimate
- 23:51 – How inflation can impact the valuation when using discounted cash flow analysis
- 26:29 – Final conclusion about $KMB
- 27:17 – Closure
European Dividend Growth Investor
I’m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. I’m not a finance professional through formal education. I’m a person who believes and takes pride in a sense of freedom, satisfaction, fulfillment and empowerment that I get from being financially competent and being conscious managing my personal money. The contents on this blog are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my blog is appropriate for you or anyone else. By reading this blog, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information provided on this blog.