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Kennedy and Nestlé: The Beginning of a New Era for the Industry?Nestlé (Ticker AT: NESN.US) is looking to calm market fears following criticism from Robert F. Kennedy Jr. appointed by Donald Trump as the new U.S. health chief. Kennedy, known for his stance against packaged foods, has used his platform to question products such as Kellogg's (Ticker AT: K.US) Fruit Loops cereals as part of his “Make America Healthy Again” campaign. However, Nestlé says it shares principles with Kennedy, particularly in terms of improving agriculture and nutrition.
Steve Presley, president of Nestlé in North America, clarified that Kennedy's concern is more about regenerative and clean agriculture, an approach that Nestlé has supported for years. This stance highlights the company's commitment to innovation in health, an effort that began in 2019 when it started ranking its products by nutritional value.
Technical & Fundamental Aspect
Looking at the monthly chart it is palpable the steady fall in value over the last 2 years from 129 francs to 76.64 francs where it is currently trading. It is important to note that like all companies listed on the Swiss index, it has suffered from the strength of the franc in its conversion of foreign earnings. Looking at quarterly results its data has been relatively stable except for the post-pandemic earnings period in 2021 which was arguably one of the best for companies in the food and beverage sector. Subsequently the net has remained relatively stable despite criticism and economic sanctions.
Looking at the chart you can see a bearish channel started in 2022 to date. At the moment it is located at the bottom of this channel. A bearish oversold signal was marked on November 13. Currently the POC is around 83-84 francs. It is currently at the bottom of the channel touching the low of 76.04 francs. Looking at the average crossover it has been advancing since February 1 with the 200 average below the 100 average and the 50 average below the 100 average. In other words, the extension of this volatility from the end of October has extended the stock's downward slide very sharply.
Why is it relevant?
Nestlé's focus on health innovation and sustainable agriculture aligns with Kennedy's concerns, which could soften the relationship between the two parties, despite previous criticism of processed products.
A shift towards sustainability
Nestlé has been the subject of much criticism in the past, especially for its involvement in controversial practices, such as the marketing of milk powder in developing countries, the exploitation of natural resources and the use of unhealthy products in its offerings. However, its current focus on sustainability and health innovation reflects a clear strategy of adaptation to social and market demands. Consumers are increasingly aware of the environmental and nutritional impacts of the products they consume, and Nestlé appears to be responding to this trend.
By aligning itself with Kennedy, who promotes public health and regenerative agriculture, Nestlé may be trying to improve its image and demonstrate its commitment to more responsible practices. This strategic move seeks to mitigate past criticism and position the company as a more positive player in the food industry.
However, the real test will be in how the company implements its commitments and whether its actions actually match the ideals it is promoting. Nestlé's challenge remains to maintain this narrative over the long term, as its history is marked by controversy.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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Nestlé SA: A stock to keep foreverCompany Overview
Nestlé S.A., established in 1866 and headquartered in Vevey, Switzerland, is the world’s largest food and beverage conglomerate. Known for its extensive portfolio of iconic brands like Nescafé, KitKat, Maggi, and Perrier, Nestlé has maintained a strong presence in North America and Europe, which together account for 59% of its revenue. In addition, it is a global leader in pet food products through brands like Purina, a sector which has shown resilience and growth. While Nestlé’s stock has faced challenges recently, it continues to be a staple in long-term portfolios.
Recent Stock Performance
Nestlé's share price has declined by over 35% since its peak in 2021-2022. This underperformance relative to the market has presented a potential entry point for long-term investors. This decline in share price is attributed to external factors such as increased competition from new weight-loss products, currency exchange fluctuations, and rising global interest rates. Despite these challenges, the company’s enduring market position, particularly in emerging markets, underscores its resilience and potential for long-term growth.
Business Segments and Revenue Breakdown
1. Beverages: Revenue of $25 billion, featuring globally recognized brands like Nescafé and Nespresso.
2. Pet Care: Nestlé leads the pet food industry with brands like Purina, generating approximately $17 billion annually. The pet sector is growing as consumers increasingly seek premium products.
3. Nutrition and Health: Generating $15.3 billion, this segment includes specialized nutrition products for infants and adults.
4. Prepared Meals and Cooking Aids: With approximately $12 billion in revenue, this segment includes Maggi and other ready-to-eat meal products.
5. Dairy Products and Ice Cream: A significant segment with $11 billion in revenue, including well-known dairy brands.
6. Confectionery: With brands like KitKat, this segment contributes over $9 billion.
Investment Thesis
Nestlé stands out as a “forever stock” for several reasons:
1. Dividend Aristocrat: Nestlé has increased its dividend for 29 consecutive years, offering a current yield of approximately 3.8%. Since 2009, the company has returned CHF 181 billion to shareholders through dividends and share buybacks, a healthy mix that demonstrates Nestlé’s commitment to rewarding shareholders.
2. Global Presence and Market Share: Approximately 41% of Nestlé's revenue originates from emerging markets (Asia, Africa, South America), where there is strong demand for premium products, a growing middle class, and solid organic growth. In these regions, Nestlé continues to gain market share and expand its brand presence.
3. Pet Sector Growth: Premiumization in the pet care market offers a robust growth driver, particularly as pet owners show a high willingness to spend on quality food. This sector remains resilient, with consumers even prioritizing their pets’ needs over their own during economic downturns.
4. Currency Challenges and Inflation Resistance: Nestlé reports in Swiss Francs, making it susceptible to currency fluctuations. In 2023, for instance, North American revenue grew by 5.3% in local currencies but showed a slight decline when converted to Swiss Francs. This effect, while impacting short-term results, does not detract from the company’s overall growth potential. Nestlé’s long-standing pricing power and ability to adjust prices to maintain margins further solidify its resilience against inflation and currency volatility.
5. Resilient Business Model: Nestlé’s predictable cash flows and low-risk business model make it an attractive investment, particularly as interest rates rise. While the recent preference for high-growth tech stocks has contributed to Nestlé's undervaluation, the company’s defensive nature remains appealing in a volatile market.
Valuation and Pricing
Nestlé currently trades at a P/E ratio of approximately 18-19, reflecting its steady but unspectacular growth profile. This valuation, while fair, does not fully capture Nestlé’s strong brand portfolio, market position, or growth potential in emerging markets. The company’s ROIC has been trending upward, indicating that management is effectively deploying capital to generate returns above the cost of capital.
Nestlé’s organic growth is targeted at 4% for 2024, with EPS growth projected at 6-10% in the medium term. Should the stock price fall to a P/E ratio of 15, it could present a compelling buying opportunity for building a substantial position.
Risks and Considerations
1. Competition from Weight-Loss Drugs: Nestlé’s food business faces an emerging threat from weight-loss drugs like Ozempic, which could reduce demand for certain products. In response, the company is developing new health products to mitigate muscle loss, which may offer a future growth opportunity.
2. Currency Exchange Effects: The appreciation of the Swiss Franc against other major currencies negatively impacts reported revenue and earnings. While a short-term challenge, this effect does not impact the company’s fundamental business model.
3. Rising Interest Rates: Defensive stocks like Nestlé become relatively less attractive as interest rates rise. However, given the company’s stable cash flows and dividends, Nestlé remains a reliable choice for income-focused investors. Additionaly interest rates have been going down over the past months, so that is good.
Conclusion and Recommendation
Nestlé is a high-quality, defensive stock with a stable growth outlook and an attractive dividend profile. Its diversified product line, strong presence in emerging markets, and growth in the pet food sector make it a reliable, long-term investment option. For investors seeking stable returns and consistent dividends, Nestlé remains a strong addition to any portfolio, particularly as a counterbalance to higher-risk, growth-oriented stocks.
In conclusion, Nestlé I think is fairly valued at its current P/E ratio. Long-term investors can consider building a position gradually, potentially increasing their stake if the P/E ratio declines. While competitors like Coca-Cola and Unilever also offer stable income, Nestlé’s broader global reach, particularly in emerging markets, provides a competitive edge that may lead to superior returns over the next decade.
This information is for informational purposes only and does not constitute financial or investment advice. Always do your own research or consult a financial professional before making investment decisions.
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Nestle Approaching Buy ZoneWe have taken out the Covid lows and we could enter the X phase of the WXY correction. In the longer term I do expect one last flush to the downside, but the downside does appears to be exhausted here as we are in the final phase of the 5 wave move to the downside. I'm playing this as a short term bounce of 15-25%.
Nestlé is known for its defensive qualities. In times of broader market volatility (elections and geopolitical issues) investors flock to high quality, consumer staples companies with strong brands and a reliable revenue stream. Nestlé's portfolio of well-established products in food, beverages, and health-related categories (such as its coffee brands, bottled water, and baby nutrition products) can appeal to investors looking for stability amid uncertainty.
Nestlé is known for its reliable and growing dividend, making it attractive to yield-seeking investors, especially in the approaching lower-interest-rate environments. A stable dividend yield can support the stock price, and as more investors focus on cash flow from dividends, increased buying pressure could lead to a short-term bounce.
Do what's best for you, do not copy what I am doing! Long 
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Roche vs. Novo Nordisk: Who will suffer the Weight Loss?Roche (ticker: ROG.SW) is losing ground on the stock due to the side effects of its new weight loss pill, CT-996, which is still in the testing phase. After a rally that boosted its shares 40% between May and September, the Swiss drugmaker has seen an 11% drop in its shares in September alone, including a decline of up to 6.75% on the U.S. stock market.
The weight-loss drug market, driven by the success of Novo Nordisk's Ozempic (ticker: NVO), is projected to reach $130 billion annually by the end of the decade. However, Roche faces challenges following trials of CT-996, where five out of six patients suffered nausea and one in six had “chronic reflux,” which has affected its competitiveness. Despite these adverse results, Manu Chakravarthy, director of product development for Roche's cardiovascular, renal and metabolism division, believes the trials are still encouraging and plans to continue with larger clinical studies to determine tolerability and improve the drug's profile.
Comparing the two companies' charts, Roche showed significant progress versus Novo Nordisk through July 31. However, after a failed attempt to break above its highs on September 2, Roche is currently in a support zone, having broken downward from the bullish channel it had held since May. In contrast, Novo Nordisk lost positions from June 24 until August 7, at which point it began to recover towards the middle of its long-term range. Currently, Roche could pull back to 214 Swiss francs if its downtrend continues. On the other hand, Novo Nordisk remains in an intermediate trading zone around $134, with a possible uptrend in the short term.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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UBS (UBSG): Too Big to Fail?Remember this analysis from over four months ago? We didn't place a limit order at that time (which is why it's greyed out), but if you followed our setup during the livestream back then, congratulations! The chart reacted beautifully at the desired level, just as we anticipated.
In my opinion, this is a great-looking chart, showing a strong reaction at a key level. I'm now looking for some long plays on UBS to gain some exposure to the Swiss market. UBS is a relatively safe stock, which is a good thing to have during phases of uncertainty.
The worst-case scenario would be a banking crash, but we believe UBS is still too big to fail. As long as it maintains this status, we like it. I'll send out a limit order once I find a good setup. For now, I wouldn't recommend any FOMO into this stock, as it could be a dead cat bounce, but we'll closely monitor it for you. 
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Roche: Ready for 120% Growth?We're trying something with Roche here, where we think that we are currently in Wave (5), having recently completed Wave (4). This assessment is better visualized on the daily chart. Hence, we should maintain the 61.8% level for this Wave 4. Anything below would statistically be too low, while above, we aim at least to revisit the old high, up to an Wave 5 extension. This scenario would place us at a level of $552, marking a 120% increase from our entry point, with a stop-loss set at 6.5%, resulting in a risk-to-reward ratio of 18.65%, which is phenomenal if it materializes. We believe the risk-reward ratio is so favorable that we must proceed with this trade. As long as we don't fall below the invalidation zone, i.e., the level of Wave (1), we continue to anticipate that Wave 4 holds. As mentioned, it wouldn't make sense for us to fall below the 61.8% level for Wave (4), as statistically, there's little to gain beyond that point.
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Hold it like a rock - Roche, what an opportunity.Hi, 1PERCENT here.
Roche Holding, a Swiss multinational biopharma company. It is like the Apple of biopharma.
There were only 3 pull backs greater than 30% in the history of the stock.
2002 ~ 2003: -45.33%
2006 ~ 2011: -52.40%
2014 ~ 2018: -30.24%
2022 ~ present: -44.89%
It is at the support zone that initiated the +95% move up from 2018 to 2022, and also is testing the trendline connecting the lows in 2003 and 2011.
If you live in the US, you might want to have some exposure to Swiss assets (CHF or stocks) and Gold & silver.
The US dollar is losing value against the Swiss Francs in the long term.
Otherwise, Roche stock price must hold up at the current support zone , otherwise, we are open for a 30+% drop to the next support zone, which will be of course, an absolute bargain.
Also, it looks like the previous turnovers from the lows were always accompanied by the MA36 and MA12 crossing (MA12 over MA36)
However, we do not have it here yet. So, let's keep an eye on it.
That's it.
1PERCENT UBS Group (UBSG): A Golden Opportunity for Investors?UBS Group (UBSG): SIX:UBSG
Considering that Switzerland is one of the first European countries potentially associated with interest rate cuts, sectors across the board, including the banking sector and specifically UBS Group, become quite intriguing. We've had to adjust and modify our analysis due to a breakout to the upside, suggesting a further upward trend before concluding the overarching trend. Please pay close attention if you're following along. We posit that Wave 2 concluded at 13.87 CHF, placing us in Wave 3.
We anticipate the reemergence of subordinate Wave ((iv)), which, in this case, should find support between the 23.6% and 38.2% levels. Given that all previous Wave 4s in UBS Group's pattern have been short and swift, we expect a repetition of this pattern, suggesting no further significant drops. Should we indeed pivot at the 38.6% extension level of 28.55 CHF and begin to develop Wave ((v)), we will issue a limit order once we observe tangible weakness in the price action. If there's an additional climb, our zone will be accordingly adjusted upwards. Long 
UBS GROUP (UBSG): From Accumulation to ActionUBS GROUP (UBSG): SIX:UBSG
The banking sector has experienced significant turbulence over the past years, which has not spared UBS Group from Switzerland. Please note, this analysis is presented in Swiss Francs, not dollars, as we're examining it from the Swiss stock exchange perspective. Unusually, we're delving into the monthly chart here, where it's evident that we've been in an accumulation phase since 2008, lasting about 15 years with no significant progress. This is the second time we've broken out, but the first time we're sustaining levels above this zone for an extended period.
Our analysis starts at the all-time low of 7 CHF (Swiss Francs), also coinciding with the COVID-19 low, from which we've seen a completed 5-wave cycle. If our foresight holds, we believe the peak at 26.55 CHF marks the top. Following this, we anticipate forming a Wave A, an overshooting Wave B, and then a Wave C that drops below Wave A for a Wave (2) correction. This correction is expected to retrace between 50% and 61.8%, aligning with the notion that Wave 2 often reaches the level of the subordinate Wave 4, situated right at or slightly below the 61.8% mark.
With the stop-loss set below these two potential outcomes and within the outlined blue support zone, we foresee a significant rise for Wave (3). This wave is typically the longest or at least not the shortest of the three impulse waves, leading us to anticipate a climb to at least 48 CHF. Our course of action is to wait, assess how the scenario unfolds, and potentially scale into positions earlier. This remains to be seen, and we'll continue monitoring and keep you updated on developments. Long 
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