Nestle SA Reg Shs. Ser. B Spons (PINK:NSRGY)
Jun 5, 2012
Nestle is the number one food company in the world based on sales. They own a wide variety of consumer products in the food, beverage, nutrition, health and pharmaceutical industries. Among Nestlé's most widely known products and brand names in the United States are baby food (Gerber), bottled water (Perrier and Poland Spring), candy (Butterfinger, Kit Kats, Smarties), coffee (Nescafe), frozen foods (Lean Cuisine, Stouffer's, Hot Pockets), ice cream (Haagen Dazs, Dreyer's), and this is just a partial list.
Nestlé's corporate headquarters are in Switzerland. The company's history dates to 1866, when the Anglo-Swiss Condensed Milk Company opened the first European condensed milk factory. One year later Henri Nestle, a pharmacist, created a nutritional infant milk product. The Anglo-Swiss and Nestle companies merged in 1905.
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The price of Nestle SA Reg Shs. Ser. B Spons (PINK: NSRGY) stock is remarkably stable compared to many on the stock exchanges. The stock's American Depositary Shares (ADS) traded just over $20 at the beginning of 2000. It meandered slowly, steadily rising, reaching $50 in March 2008. The stock did not implode during the financial crisis. It fell along with the markets in 2008 and 2009, settling in the low 30's. Then the stock began climbing once again, attaining a high of $63 on March 30, 2012. The stock traded in the high 50's range during the month of June 2012.
Over the past few years recession in the United States and European financial woes impacted Nestlé's bottom line. Although food is an essential purchase, the varieties of foods bought vary depending on an individual or family's disposable income. Economic troubles in recent years cut across most economic levels. Consumers purchase cheaper brands, skip unneeded items, and buy low-priced, substitute items. Nestlé's has been negatively affected by these trends.
Over the long term, however, Nestlé's has proven to be a positive, conservative addition to an investment portfolio. The company pays a dividend, so although the stock price fluctuates there is income from the investment. Technology changes, consumer tastes change, companies come and go, but large corporations like Nestlé's are always seeking new additions to their product lines. The company has the resources to fund research and development. Strong financial management has in the past, and hopefully will continue in the future, to successfully manage and grow this multinational corporation.
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