CHD

Church & Dwight($CHD) Executives Buy the Dip: Three Key Leaders Purchase Stock Amid 30% Decline

08/12/2025 16:21

Church & Dwight($CHD) is capturing investor attention as three key executives made consecutive stock purchases in August amid a roughly 30% year-to-date decline. Their buying activity around the $91 level signals strong management confidence in the current valuation. Founded in 1846, Church & Dwight is a leading American consumer goods company known for household staples like ARM & HAMMER baking soda, TROJAN condoms, and OXICLEAN cleaners. While typically resilient due to its defensive consumer staples nature, the stock has faced multiple headwinds this year. The most notable change is management's buying pattern. EVP Michael Read purchased 2,000 shares at $91.27 on August 5, EVP Lee Mcchesney bought 5,409 shares at $91.38 on August 8, and President Richard Dierker acquired 5,470 shares at $91.57 on August 12. This contrasts sharply with former CEO Matthew Farrell's consecutive sales of 600,000 shares (approximately $62 million) in November 2024. Significantly, these buyers are all key figures under the new CEO regime. Since Rick Dierker became CEO in March 2024, management stock purchases have notably increased, suggesting strong internal confidence in the company's turnaround potential under new leadership. Financial results indicate the stock decline may have been excessive. Q2 2025 revenue of $1.51 billion declined 0.3% year-over-year but exceeded analyst estimates ($1.48 billion) by 1.76%. More importantly, earnings per share of $0.94 significantly beat consensus ($0.85) by 10.59%, demonstrating improving profitability. The Consumer International segment showed particular strength, growing 5.3% to $277.6 million, maintaining growth momentum. While domestic household products ($650 million) and personal care ($504.1 million) revenues declined slightly, both exceeded expectations, indicating the company's fundamental competitiveness remains intact despite domestic market challenges. The stock's decline primarily stemmed from June's nationwide recall of Zicam cold remedies and Orajel oral care products due to microbial contamination, plus ongoing litigation regarding PFAS chemicals in Trojan condoms. However, industry experts view these as temporary issues with limited impact on overall revenue. Valuation has become increasingly attractive. At the current price of $91.66, the forward P/E has compressed to 26.18x from a trailing P/E of 43.24x, approaching industry averages (22-25x). Piper Sandler named Church & Dwight among its top beauty and wellness stock picks for 2025 with raised price targets. Financial health remains solid with $923.2 million in cash, $1.07 billion in operating cash flow, and a manageable debt-to-equity ratio of 54.84%. The company continues paying stable dividends with a forward yield of 1.29%. Investors should monitor Q3 results for continued international growth momentum and the financial impact of recall issues. If international business maintains double-digit growth and one-time costs remain within expected ranges, management's buying conviction may prove prescient. Church & Dwight appears to present a compelling opportunity where temporary setbacks have created excessive valuation compression, supported by management buying, reasonable valuation, and stable cash flows, though domestic market weakness and external risks require continued monitoring.