Proctor and Gamble

PG ( Proctor and Gamble ) is in the consumer staples business. It was the best performing dow jones stocks for the recently ended quarter. Let us quickly take a look at the financials to see if it is a buy at current prices.WASHINGTON, Oct 2 (Reuters) - U.S. President Barack Obama's politically risky Olympics gamble failed to bring home the gold on Friday, with the Olympics committee's refusal to grant the 2016 Summer Games to his hometown Chicago.

The president, whose even-tempered personality has earned him the nickname "No Drama Obama," broke from that mold to make an overnight dash from Washington to Copenhagen to personally lobby for Chicago.

Obama and his wife, Michelle, had taken their star power to the Danish capital to make Chicago's case, ignoring the carping from Republican opponents who charged it was a bad time to go with foreign policy challenges in Iran and Afghanistan and the U.S. Congress bogged down in a domestic healthcare debate.

"I'm asking you to choose Chicago. I'm asking you to choose America," Michelle Obama told committee members.

Her husband said, "If you do, if we walk this path together
With a P/E of 23 and Price/Cash flow of close to 18, the stock doesnt appear cheap at current prices. Let us take a deeper look at the numbers to see how things look like.

The company bought Gillette recently, which has helped its cashflow and net margins. The EPS has grown at the rate of 9% a year for the past ten years and is likely to grow at that rate in the future.

The business is doing well on all fronts as noted in the company's 10-Q:

Net sales fiscal year to date increased 14 percent to $57.20 billion behind 11 percent volume growth, including an additional three months of Gillette results during the current fiscal year to date period versus the comparable year ago period. Organic volume grew five percent with broad-based growth across the business. Every reportable segment delivered year-on-year organic volume growth driven by product initiatives including Tide Simple Pleasures, Febreze Noticeables, Pantene Color Expressions, Olay Regenerist and Definity and the Head & Shoulders and Herbal Essences restages. Price increases taken across several segments added one percent to sales growth while favorable foreign exchange trends had a positive two percent impact. Product mix had no net impact on sales growth as the favorable mix impact from the additional period of Gillette results was offset by disproportionate growth in developing regions, where unit selling prices are below the Company average. Organic sales increased six percent fiscal year to date.

Additionally, the per share growth has been impressive partly because of the accretive nature of Gillette's business.

Net earnings increased 19 percent to $8.07 billion behind organic sales growth, the impacts from the addition of Gillette, including financing and other acquisition-related expenses, and profit margin expansion. Diluted net earnings per share were $2.37, up 13 percent versus the prior year. Earnings per share growth lagged net earnings growth due to a net increase in the weighted average shares outstanding in the current year to date period (incremental shares issued in conjunction with the Gillette acquisition on October 1, 2005, net of share repurchases, primarily under the Gillette repurchase program).

The fastest growing business segment was health care products. The gillette razors and blade segment is growing impressively in the developing countries.
Chicago and the United States of America will make the world proud."

All that was for naught as Chicago was eliminated in the first round of voting, a decision that brought gasps from the Chicago contingent at the Copenhagen meeting.

The Republican National Committee chairman, Michael Steele, was unsparing in his criticism in a statement issued before the decision was announced and on a day when the U.S. jobless rate rose to 9.8 percent, a 26-year high.

"As President Obama travels to Copenhagen to bring the Summer Olympics to his hometown seven years from now, Americans back home are increasingly concerned they won't have a job seven months from now as they see more and more of their neighbors and friends lose jobs today," Steele said.

BAD NEWS

Obama had originally planned not to go but changed his mind when it was clear that other leaders wanting their countries to host the 2016 Games would be there.

The Democratic president got the bad news as Air Force One flew him back to Washington, where just about every move he makes goes under a partisan microscope.

While more Republican criticism was likely, it was unclear whether the failure would have a lasting impact on Obama's political image. His job approval rating has stabilized at slightly above 50 percent after dropping about 10 points over the summer.

University of Virginia political scientist Larry Sabato said he believed the issue would not linger.

"It's a classic political hullabaloo that will fade quickly," he said. "I think it actually points up a problem the Republicans are having, which is focusing the unhappiness and disagreement they have with Obama. In politics you have to be able to complain about the right things."

Overall, PG is a great business. The current price levels are a bit too high - the right time to buy this was during the summer months during the peak of the credit crisis.