Friday Morning Coffee 153: The return of the power brands!

110621 Friday Morning Coffee

Friday Morning Coffee 153: The return of the power brands!

As value investors, we like the so-called moats, i.e. characteristics of a business that enable it to generate superior profitability over time and create barriers of entry that are hard for the new entrants to overcome. These moats can come in different forms and shapes, most frequently as strong market shares enabling the company to generate economies of scale, strong brands, intellectual property or privileged access to supplies. Unfortunately, companies presenting real moats are difficult to find.

We believe Reckitt Benckiser has these moats due to its brands that are household names for millions of families globally:

    • Health (61% of sales): Lysol, Sargotan, Dettol, …
    • Home care & hygiene (39% of sales): Finish, Veet, Vanish, Durex, Cillit Bang, …