The Motley Fool

Why I see the Unilever share price fall as a great opportunity to buy!

Image source: Getty Images.

As nerve-wracking as the continued tumble of the FTSE 100 can be as an investor, there is solace to be found within it. The solace comes in the form of high-quality companies that are currently trading at low prices, but are a long-term positive bet. I find Unilever (LSE: ULVR) shares particularly attractive in this regard.

There is a long list of reasons to remain positive on the company. The most topical of these right now is the fact that it has decided to remain headquartered in London. Unilever announced the move of its headquarters entirely to Netherlands in March 2018, which would have meant an exit from the FTSE 100 index. After much shareholder protest, however, the company scrapped the idea earlier this month, bringing recent investor uncertainty related to the company to an end. In principle, it might have been a good move to streamline the company further, but it was still apparently one that did not take enough consideration for shareholder sentiments.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Likely because of this, damage to the Unilever share price was exacerbated, with a fall sharper in recent months than in the FTSE 100. For October so far, Unilever has been trading at an average price of 4,066p, which is 4.4% down from the September average price, and makes it the second consecutive month of share price falls. This is also over double the 2.1% fall in FTSE 100 over the period! As a result, Unilever is now available at a relatively cheap rate.

And this is at a time when the fundamental case to buy it remains in place. As a leading global consumer goods company with well-known brands like Dove and Lipton, its demand is stable. This makes it a good ‘defensive’ stock, which serves investors well in times of slump when a number of other sectors are witnessing declining demand. With Brexit looming large on the horizon, it is likely that the UK’s economic growth could see a dent, and some forecasters go so far as predicting a full-fledged recession. In this scenario, consumer staples companies like Unilever are among those least likely to be impacted. Moreover, much of the company’s demand comes from other countries, thus insulating it from economic conditions in the UK.

Last but not least, Unilever’s financials remain strong. The company has witnessed increasing profits for the past two years and revenues are set to show growth for the second year running in 2018. In its latest financial update released earlier this week, Unilever showed 2.9% sales growth up until the nine months of 2018. The company’s press release also maintained that sales will continue to be in the 3-5% range, with improvement in profits and a strong cash flow.

Unilever is not necessarily the stock to buy to make fast and big gains, but it is one to hold on to when anticipating rough weather.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Manika does not currently own any shares of Unilever. The Motley Fool UK owns shares of and has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.