CHD

Church & Dwight ($CHD) Executives Keep Buying Around $90 Despite Stock Struggles - Insider Signal vs Market Reality

08/12/2025 05:08

Church & Dwight ($CHD) executives are making consecutive purchases around the $90 stock level, drawing investor attention. This represents a stark contrast to the massive insider selling late last year, including the CEO, signaling that company insiders view current stock levels as attractive. Founded in 1846, Church & Dwight is a leading U.S. consumer goods company with iconic brands deeply embedded in daily life, including ARM & HAMMER baking soda, TROJAN condoms, and OXICLEAN detergents. With a $25 billion market cap, the company generates $6 billion in annual revenue through three business segments: household products, personal care, and specialty products, establishing its position as a consumer defensive stock. The most notable change is in insider trading patterns. In stark contrast to then-CEO Matthew Farrell's sale of 600,000 shares over four days in November 2024 at an average price of $103-104, cashing out $62 million, executives have been actively buying since May 2025. New President Richard Dierker and EVP Michael Read have made aggressive purchases in the low-$90s range, with EVP Lee Mcchesney continuing the buying trend in August at $91.38 per share for 5,409 shares. This shift in insider trading patterns is not coincidental. As the stock declined approximately 18% from its November 2024 peak of $111 to current levels around $91, executives who know the company best appear to view this as a bottom-fishing opportunity. Their judgment appears well-founded. Financially, Church & Dwight remains solid. Q2 2025 revenue of $1.51 billion slightly decreased year-over-year but exceeded analyst estimates, while EPS of $0.94 improved from $0.93 in the prior year, beating consensus by 10.6%. The international consumer segment particularly showed strength with 5.3% growth, validating the global expansion strategy. With operating cash flow of $1.07 billion and free cash flow of $834 million supporting dividend sustainability, plus $923 million in cash reserves ensuring liquidity, the company shows no financial distress. The debt-to-equity ratio of 54.8% remains at appropriate levels, indicating solid financial stability. Valuation has also reached attractive levels. The forward P/E of 26.18x represents significant improvement from the previous 43x, reflecting expectations for earnings growth. Considering the company's position as a consumer defensive stock with low volatility (beta 0.43) and stable dividend yield of 1.29%, current price levels offer considerable appeal to long-term investors. However, risk factors warrant attention. Trump administration tariff policies could increase cost pressures, while declining specialty products sales (-3%) and personal care segment slowdown (-2.6%) may constrain near-term growth momentum. The voluntary recall of Zicam products in June due to microbial contamination poses temporary brand image concerns. Despite these one-time factors, consecutive insider buying sends a powerful signal. New CEO Richard Dierker's two purchases in May totaling 13.4 million shares particularly demonstrates new management's strong confidence in the company's future. Investors may consider the low-$90s level, where insider buying continues, as an attractive entry zone. However, caution is warranted above $100. Additionally, the Q3 earnings scheduled for October 31 should be closely monitored for management's clear guidance on tariff impacts and post-recall measures.