Core Insights - Oakmark International Fund's fourth-quarter 2025 investor letter highlights a focus on long-term capital appreciation through investments in non-U.S. mid and large-cap companies, with a reported return of 4.83% for the fund, slightly underperforming the MSCI World ex USA Index's gain of 5.20% [1] Fund Performance - The fund's top performance contributors were in the healthcare and financial sectors, while consumer staples were the only detractor [1] - The fund's top five holdings can be reviewed for insights into its best investment picks for 2025 [1] Company Focus: Unilever PLC - Unilever PLC is identified as a key stock in the fund's portfolio, operating in various segments including Beauty & Wellbeing, Personal Care, Home Care, Nutrition, and Ice Cream [2] - As of January 14, 2026, Unilever's stock closed at $65.33, with a one-month return of -0.20% and a 10.00% gain over the last 52 weeks, alongside a market capitalization of $142.546 billion [2] - The fund appreciates Unilever's refreshed management team and their strategic initiatives aimed at improving execution and driving consistent growth, particularly in higher-margin categories [3] - Despite a strong outlook, Unilever trades at a discount compared to peers due to historical underperformance, presenting an investment opportunity in a company with strong brands and improved management [3] Market Sentiment - Morgan Stanley has resumed coverage of Unilever with an overweight view, noting that it is not among the 30 most popular stocks among hedge funds, with 27 hedge fund portfolios holding the stock at the end of the third quarter [4] - While acknowledging Unilever's potential, there is a belief that certain AI stocks may offer greater upside potential and lower downside risk [4]

Core Viewpoint - Unilever PLC (NYSE:UL) is facing challenges in its stock performance and market confidence, with recent downgrades from analysts indicating concerns over valuation and earnings growth potential [2][3]. Group 1: Analyst Ratings and Price Targets - BNP Paribas downgraded Unilever PLC from Outperform to Neutral with a price target of $71, citing that valuations in the consumer staples sector are expected to remain "cheap" [2]. - Jefferies maintained an Underperform rating but raised its price target for Unilever from 4,000 GBp to 4,100 GBp, highlighting challenges in price and operating margins that limit earnings growth [2]. Group 2: Financial Performance and Market Concerns - Unilever's stock is down by 1.65% year-to-date as of January 9, 2026, indicating a negative market sentiment [3]. - Jefferies noted that volume and mix are expected to be approximately 2% in the fourth-quarter results, with concerns about declining U.S. growth contributions affecting market confidence in the first half of 2026 [2].

Core Insights - Unilever Ventures is increasing its investment in India's beauty sector by leading a $3 million seed funding round for Secret Alchemist, a clean fragrance brand [1][2] - The funding will be utilized to expand Secret Alchemist's product portfolio, enhance research and development, and strengthen its leadership team [2] - The brand aims to scale its presence and distribution while maintaining its focus on being an India-first label with global ambitions [2] Company Overview - Secret Alchemist was founded in 2022 by Ankita Thadani, Akash Valia, and Samantha Ruth Prabhu, focusing on aromatherapy and essential oils [4] - The brand has transitioned to primarily offering fragrances that blend aromatherapy with modern perfumery, emphasizing wellness, scent, and self-expression [4] - The brand is recognized for its commitment to transparency, being one of the first in India to publish full ingredient and allergen disclosures in perfumery [7] Market Positioning - The clean fragrance category is emerging in India, with Secret Alchemist positioned to lead this trend [3][6] - The brand is backed by a celebrity founder who is actively involved in product development, enhancing its market appeal [6] - There is significant under-penetration in the fragrance category in India, indicating strong long-term growth potential for both the brand and the category [6]

Core Viewpoint - Unilever Indonesia plans to sell its "Sariwangi" tea business to Savoria Kreasi Rasa for an estimated value of 15 trillion Indonesian Rupiah (excluding tax) [1] Group 1 - The transaction is expected to be completed by March 2 or another mutually agreed date [1] - Unilever Indonesia will return the proceeds from the sale to shareholders in the short term [1] - The company aims to focus on its core business following the sale [1]

Core Insights - Unilever has spun off its ice cream business, Magnum, into a separate company, resulting in a new stock appearing in the portfolio of investors [1] Company Developments - The spin-off of Magnum is a strategic move by Unilever to focus on its core business areas and potentially unlock value for shareholders [1]

Core Viewpoint - Unilever has spun off its ice cream business, Magnum, into a separate company, resulting in a new stock appearing in the portfolio of investors [1] Company Summary - The spin-off of Magnum from Unilever indicates a strategic move to streamline operations and potentially enhance shareholder value [1]

Core Insights - The "High Income DIY Portfolios" service aims to provide high income with low risk and capital preservation for DIY investors, particularly targeting income investors such as retirees [1] - The service offers a total of 10 model portfolios, including various strategies for income generation and risk management, with a focus on sustainable yields [2] Group 1: Portfolio Strategies - The service includes seven portfolios: three buy-and-hold, three rotational portfolios, and a conservative NPP strategy portfolio designed for low drawdowns and high growth [1] - The investment approach emphasizes dividend-growing stocks and aims for a 30% reduction in drawdowns while targeting a 6% current income [2] Group 2: Additional Features - The service provides buy and sell alerts, live chat, and strategies for portfolio management and asset allocation to help investors achieve stable, long-term passive income [2]

Core Viewpoint - Unilever PLC is focusing on growth in faster-growing segments such as beauty, wellness, and personal care, with a strategic shift supported by significant investment in mergers and acquisitions [2][3]. Group 1: Company Strategy and Financials - Morgan Stanley has resumed coverage of Unilever with an Overweight rating and a price target of $60.10, indicating confidence in the company's growth trajectory [2]. - Unilever plans to invest approximately €1.5 billion ($1.74 billion) annually in mergers and acquisitions, particularly targeting the US market, reflecting its belief in long-term growth opportunities [3]. - Following the demerger of its ice cream business, Unilever expects its second-half operating margin to be at least 19.5%, an improvement from 18.5% prior to the split [4]. Group 2: Market Performance and Shareholder Impact - Unilever retained a 19.9% stake in the newly listed Magnum Ice Cream Company, which debuted with a market value below analyst expectations of around $9.1 billion, affected by index funds exiting after the spinoff [5]. - Shareholders received one Magnum share for every five Unilever shares owned, but the stock's eligibility for major indices like the FTSE was flagged as a risk, impacting early trading performance [5].

Core Viewpoint - The article discusses Unilever's strategic shift towards growth through organizational changes, particularly the promotion of Leandro Barreto to Chief Marketing Officer (CMO), which reflects the company's focus on a consumer-centric growth model and enhanced marketing strategies [5][14][25]. Group 1: Leadership Changes - Unilever announced the promotion of Leandro Barreto to CMO, effective January 1, 2026, expanding his responsibilities to oversee the entire marketing function of the company [3][5]. - This leadership change is part of a broader organizational restructuring involving adjustments to 200 senior management positions as part of an operational and organizational transformation plan [5][17]. Group 2: Marketing Strategy - Unilever is shifting its marketing strategy to prioritize social media, increasing its advertising budget on these platforms from 30% to 50% of total ad spending [13][25]. - The company aims to enhance its engagement with consumers through localized and refined marketing efforts, including a significant increase in collaborations with Key Opinion Leaders (KOLs) [13][14]. Group 3: Financial Performance - In the first three quarters of the year, Unilever's beauty and wellness segment saw a 5.1% increase in underlying sales, driven by both volume and price contributions [11]. - The personal care segment also performed well, with a 4.1% increase in underlying sales, largely attributed to successful innovations in brands like Dove [11][12]. Group 4: Brand and Portfolio Strategy - Unilever is undergoing a significant brand and category restructuring, with plans to streamline its brand portfolio to focus on high-growth and core brands, aiming to reduce the total number of brands to under 200 [19][20]. - The company has already divested over 20 beauty or personal care brands since 2023, including the sale of non-core assets like Suave and the Eli d a Beauty unit [20][21]. Group 5: Market Focus - China has emerged as a key market for Unilever, showing low single-digit sales growth amidst overall company challenges, and is identified as a critical target for high-end beauty and health business expansion [28][29]. - The company is adapting its research and marketing strategies in China to align with local consumer demands, emphasizing high-value skincare and beauty products [28][39].

Core Viewpoint - Unilever's "Rainbow Carbon" strategy integrates sustainable practices into its product development and manufacturing processes, utilizing various carbon sources to reduce reliance on fossil fuels and promote environmental responsibility [1][3][4]. Group 1: Sustainable Product Development - Unilever is transforming carbon emissions into raw materials for products like laundry pods by collaborating with zero-carbon industrial parks to convert captured carbon into ethanol or methanol, which are then used in surfactants [3][4]. - The company is focusing on plant-based raw materials, including orange peels and seaweed, to create environmentally friendly surfactants, thereby reducing dependence on petroleum [3][4]. Group 2: Packaging Innovations - Unilever aims to use 25% recycled plastic (PCR) in its product packaging, with a recent development featuring a laundry liquid bottle made from 53% PCR [5][6]. - The company has established a packaging co-creation center that utilizes digital platforms and AI to streamline the design process, significantly reducing the time required to create packaging prototypes [6]. Group 3: Manufacturing and Energy Efficiency - All of Unilever's factories in China have achieved 100% green electricity, sourced from renewable resources like solar and wind energy, to minimize environmental impact [8]. - The Guangzhou factory employs advanced technologies such as automated guided vehicles and sophisticated water treatment processes to enhance operational efficiency and sustainability [7][8]. Group 4: Logistics and Distribution - Unilever has introduced a "Factory Direct to Consumer" model, reducing delivery times by 33% and minimizing transportation distances, which contributes to lower carbon emissions [9][10]. - The company is gradually incorporating green energy vehicles into its logistics operations, with a pilot program for electric vehicle transportation between Shenzhen and Hong Kong [10]. Group 5: Industry Trends and Consumer Engagement - A market survey indicated that 80% of consumers prefer eco-friendly products, prompting Unilever to develop high plant-based content products to meet consumer demand [12]. - The competitive landscape in the personal care industry is increasingly focused on sustainability, with companies needing to effectively communicate their environmental initiatives to consumers [12].