It is quite amazing that there is now a rush to buy any of the consumer packaged goods companies -- which are now heavily underweighted after the headlong rush into the cyclicals.
Take a company like Clorox (CLX) . Does it make sense to think that if Kraft Heinz (KHC) or Unilever (UL) has a war chest and bankers, and they can't come to an agreement, then one of them could go for Clorox?
I think the answer is yes.
Clorox has the finest growth and is a fantastic base to expand on. Benno Dorer, the CEO, has no desire to sell. I know that from my numerous interviews with him. But you get enough of a premium, well, why not? This one's been rumored forever.
Colgate-Palmolive (CL) is also having a monster rally on big volume. Given the huge size of a Kraft Heinz deal, it could make sense go for Colgate after that disappointing quarter -- A quarter that is just not in sync with what this company has produced in the past.
Kimberly-Clark (KMB) could fall under that same reasoning -- if it weren't for the last quarter, which was quite good.
The most important thing to recognize is the sheer lack of good candidates worth purchasing.
So, all are in play until proved otherwise, which means there's more ahead -- despite the incredibly stretched valuations.