Fundsmith Equity Fund Overview - Fundsmith Equity Fund's T Class Accumulation shares returned 0.8% in 2025, underperforming the MSCI World Index which returned 12.8% [1] - Since inception, the fund has outperformed the index by 1.7% per annum [1] - Underperformance in 2025 attributed to index concentration, growth of assets in Index Funds, and dollar weakness [1] Church & Dwight Co., Inc. Analysis - Church & Dwight Co., Inc. (NYSE:CHD) stock closed at $86.66 on January 12, 2026, with a one-month return of 2.50% and a 52-week loss of 17.69% [2] - The company has a market capitalization of $21.11 billion [2] - Fundsmith noted that Church & Dwight is affected by mixed consumer fortunes in the US, which is impacting demand for its discount products [3] - In Q3 2025, Church & Dwight reported a revenue increase of 5% and organic sales growth of 3.4% [3] - The stock is not among the 30 most popular stocks among hedge funds, with 44 hedge fund portfolios holding it at the end of Q3 2025, up from 39 in the previous quarter [3] - Fundsmith believes certain AI stocks present greater upside potential compared to Church & Dwight [3]

Group 1: Company Overview - Church & Dwight Co., Inc. (NYSE:CHD) is recognized as the leading US producer of sodium bicarbonate, commonly known as baking soda, and operates a diverse portfolio of personal care, household, and specialty brands [5] Group 2: Recent Developments - On January 5, Wells Fargo maintained an Overweight rating on Church & Dwight but reduced its price target from $100 to $92 as part of an update to its models across Beverage, Food, and Home and Personal Care sectors, extending these assumptions into 2026 [2] - In December, Church & Dwight completed a strategic review of its vitamins, minerals, and supplements (VMS) business, announcing a definitive agreement to sell the VitaFusion and L'il Critters brands to Piping Rock Health Products [3] - The VMS business represents less than 5% of the expected net sales for 2025, indicating that the sale will have a limited impact on the overall business [4] Group 3: Financial Implications - The company anticipates a one-time, after-tax charge of $40 million to $45 million in the fourth quarter of 2025 related to the sale, which includes net proceeds, a non-cash impairment, and costs associated with the transition and transaction [4]

Core Insights - The Fundsmith Equity Fund reported a total return of +0.8% for 2025, underperforming the MSCI World Index which rose by +12.8% [4][7]. - Since inception on November 1, 2010, the Fund has outperformed the Index by 1.7% per annum with a Sortino Ratio of 0.75, indicating less downside volatility compared to the Index [7][8]. - The Fund is ranked as the third best performer in the Investment Association Global sector of 155 funds since inception, with a return 322 percentage points above the sector average [8]. Performance Analysis - The Fund's performance in 2025 was impacted by three main issues: index concentration, the growth of assets in index funds, and dollar weakness [9][10][36]. - The top ten stocks in the S&P 500 accounted for 39% of its value and contributed 50% of its total return in USD by the end of 2025, highlighting significant market concentration [13][10]. - The rise of index funds has led to a momentum strategy that disproportionately benefits large-cap stocks, making it challenging for active funds to compete without holding these stocks [17][20]. Market Dynamics - The US dollar weakened against the pound from approximately $1.25/GBP to $1.35/GBP during 2025, affecting the GBP value of the Fund as most companies are US-listed [36][40]. - The price of gold reached a 50-year high of $4,319 per ounce, reflecting concerns about dollar strength and market conditions [39]. Portfolio Composition - The Fund's portfolio turnover was low at 12.7%, with a total cost of investment (TCI) of 1.06%, indicating a focus on minimizing trading costs [70][72]. - The weighted average free cash flow yield of the portfolio increased from 3.1% to 3.7% during 2025, suggesting improved valuation relative to the S&P 500 [68][69]. Stock Contributions - The top five detractors from the Fund's performance included Novo Nordisk, Automatic Data Processing, Church & Dwight, Coloplast, and Fortinet, with Novo Nordisk facing significant challenges in its market [45][46]. - Conversely, the top contributors were Alphabet, IDEXX, Philip Morris, Meta Platforms, and Microsoft, with Alphabet making its first appearance among the top contributors [51][52]. Investment Strategy - The Fund maintains a strategy focused on investing in high-quality companies with predictable growth and adequate returns on capital, avoiding momentum-driven investments [41][42]. - The Fund's management emphasizes the importance of understanding the underlying business performance and maintaining a long-term perspective on investments [60][79].

Core Insights - Church & Dwight Co., Inc. (CHD) is leveraging product innovation to maintain market share in a competitive consumer environment [1][8] - The company reported strong performance from new product launches in early 2025, contributing to market share expansion [2][8] - Incremental upgrades across brands are aimed at enhancing brand differentiation amid increased promotional activity and private-label competition [3] Product Performance - In Q3 2025, CHD gained market share in four of its eight power brands: ARM & HAMMER, THERABREATH, HERO, and TOUCHLAND [4][8] - THERABREATH showed significant consumption growth, while HERO and TOUCHLAND performed well due to ongoing product launches and brand engagement [4] - ARM & HAMMER benefited from sustained brand support across multiple categories [4] Strategic Focus - The company's strategy is centered on consistent product refreshes and targeted enhancements to reinforce its established portfolio [5] - CHD aims to sustain brand relevance and defend market share through disciplined execution rather than large disruptive launches [2][5] Market Performance - CHD shares have increased by 2.8% over the past month, outperforming the broader Consumer-Staples sector, which declined by 0.9% [6] - The stock has also outperformed the S&P 500 index and the industry growth rates of 1.4% and 1.6%, respectively [6] Valuation Metrics - CHD currently trades at a forward 12-month P/E ratio of 22.19, which is above the industry average of 17.67 and the sector average of 16.01 [10]

Core Viewpoint - Ahold NV (ADRNY) is currently viewed as a better value opportunity compared to Church & Dwight (CHD) based on various financial metrics and rankings [1]. Group 1: Zacks Rank and Earnings Outlook - Ahold NV has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to Church & Dwight, which has a Zacks Rank of 3 (Hold) [3]. - The Zacks Rank emphasizes companies with positive estimate revision trends, which is a key factor for value investors [2]. Group 2: Valuation Metrics - Ahold NV has a forward P/E ratio of 12.92, significantly lower than Church & Dwight's forward P/E of 22.65, suggesting that ADRNY is undervalued [5]. - The PEG ratio for Ahold NV is 1.81, while Church & Dwight's PEG ratio is 3.95, indicating that ADRNY has a more favorable earnings growth outlook relative to its price [5]. - Ahold NV's P/B ratio is 2.24, compared to Church & Dwight's P/B of 4.86, further supporting the argument that ADRNY is a better value investment [6]. Group 3: Overall Value Grade - Ahold NV has earned a Value grade of A, while Church & Dwight has received a Value grade of D, highlighting the relative attractiveness of ADRNY for value investors [6]. - Stronger estimate revision activity and more attractive valuation metrics position Ahold NV as the superior option for value investors at this time [7].

Company Overview - Church & Dwight Co., Inc. is the leading U.S. producer of sodium bicarbonate, commonly known as baking soda [2] - The company was founded in 1846 and manufactures a wide range of personal care, household, and specialty products under well-known brand names such as ARM & HAMMER®, TROJAN®, OXICLEAN®, FIRST RESPONSE®, NAIR®, ORAJEL®, XTRA®, BATISTE®, WATERPIK®, ZICAM®, THERABREATH®, HERO®, and TOUCHLAND® [2] Upcoming Events - Church & Dwight will host a webcast for the 2026 Analyst Day to discuss the fourth quarter and year-end 2025 earnings results on January 30, 2026, at 12:00 p.m. ET [1] - Media and investors can access the live webcast at the company's investor relations website starting at 12:00 p.m. ET, with a replay also available [1]

Company Overview - Church & Dwight Co., Inc. (CHD) has a market capitalization of $20.1 billion and operates in the consumer packaged goods sector, focusing on household, personal care, and specialty products across various segments [1] Financial Performance - Analysts project CHD to report an adjusted EPS of $0.85 for fiscal Q4 2025, reflecting a 10.4% increase from $0.77 in the same quarter last year [2] - For fiscal 2025, the expected adjusted EPS is $3.48, a 1.2% increase from $3.44 in fiscal 2024, with further growth anticipated to $3.78 in fiscal 2026, representing an 8.6% year-over-year increase [3] Recent Stock Performance - Over the past 52 weeks, CHD shares have decreased by 19.9%, underperforming the S&P 500 Index, which gained 16.4% during the same period [4] - Following the release of stronger-than-expected Q3 2025 results, CHD shares rose by 7.2%, with adjusted EPS of $0.81 exceeding Wall Street estimates and the company's own outlook [5] Growth and Guidance - Revenue for Q3 2025 increased by 5% year-over-year to $1.59 billion, surpassing forecasts, while cash from operations rose by 19.6% to $435.5 million [5] - Management has raised its full-year guidance, projecting an adjusted EPS of approximately $3.49 and cash from operations of around $1.2 billion [5] Analyst Sentiment - The consensus rating for CHD stock is "Moderate Buy," with nine analysts recommending "Strong Buy," one "Moderate Buy," eight "Hold," and three "Strong Sell" [6] - The average analyst price target for Church & Dwight is $97.78, indicating a potential upside of 16.6% from current levels [6]

Group 1 - Church & Dwight Co., Inc. (NYSE:CHD) is recognized as one of the 14 Best Dividend Aristocrats to invest in heading into 2026 [1] - Citi upgraded Church & Dwight from Sell to Neutral, raising its price target from $85 to $87, citing improved sales outlook for 2026 as year-over-year comparisons become easier [2] - The company completed a strategic review of its vitamins, minerals, and supplements business, announcing the sale of the VitaFusion and L'il Critters brands to Piping Rock Health Products [3] Group 2 - The sale includes the brands, related trademarks and licenses, and manufacturing and distribution facilities in Vancouver and Ridgefield, Washington, with closing expected before year-end, subject to standard conditions [4] - The VMS brands account for less than 5% of expected 2025 net sales, and Church & Dwight anticipates a one-time, after-tax charge of $40 million to $45 million in Q4 2025 [4] - Founded in 1846, Church & Dwight is the leading US producer of sodium bicarbonate and offers a diverse range of personal care, household, and specialty products under well-known brand names [5]

Core Insights - Church & Dwight Co., Inc. (NYSE:CHD) is recognized as one of the 15 Best Stocks to Buy for the Long Term [1] - Argus has lowered its price target for CHD to $102 from $110 while maintaining a Buy rating, citing a renewed brand focus that could support an expected 8% annual EPS growth [2] - The company reported a revenue of $1.6 billion for Q3 2025, a 5% increase year-over-year, exceeding analysts' estimates by $49.8 million [4] Financial Performance - CHD's organic sales grew by 3.4%, with domestic sales increasing by 2.3% and international sales rising by 7.7% [4] - The company achieved a 19.6% year-over-year growth in operating cash flow, amounting to $435.5 million [4] Strategic Initiatives - CEO Richard Dierker highlighted the July acquisition of TOUCHLAND, the fastest-growing hand sanitizer brand in the US, which has shown double-digit consumption growth [3]

Core Viewpoint - Church & Dwight Co., Inc. has completed a strategic review of its vitamin, minerals, and supplement (VMS) business and has reached a definitive agreement to sell the VitaFusion® and L'il Critters® brands to Piping Rock Health Products, Inc. [1] Group 1: Transaction Details - The agreement includes the sale of the VitaFusion® and L'il Critters® brands, relevant trademarks and licenses, as well as the company's manufacturing and distribution facilities located in Vancouver and Ridgefield, Washington [1]