{
  "docId": "019dd923-622c-750b-8b98-c3e7825e1948",
  "docSlug": "8b6a62f49fba",
  "documentTitle": "Church & Dwight Co., Inc. (CHD)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-09-05 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 84,
  "pageCount": 92,
  "prevPage": 83,
  "nextPage": 85,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 6,
  "notes": "Uses a 'Bull vs. Bear' comparison framework to systematically dismantle an analyst's thesis.",
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  "slideHref": "/slides/019dd923-622c-750b-8b98-c3e7825e1948/84",
  "deckHref": "/decks/019dd923-622c-750b-8b98-c3e7825e1948",
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      "kind": "callout",
      "text": "Bull: \"Strong Management\"\nBear: Promotional and weak management, resorting to potentially misrepresenting results to reap unjust comp. CEO Farrell has a history of failure at Alpharma",
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      "kind": "callout",
      "text": "Bull: \"Best-In-Class M&A\"\nBear: Legacy \"Power Brand\" deals have been failures. Current deals are already showing signs of failure",
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      "kind": "callout",
      "text": "Bull: \"High EPS Visibility\"\nBear: Low visibility with increasing risks in China and Hong Kong. Management resorting to burying one-time items (accounting changes + earnout reversals) to boost EPS. Smallest dividend increase in recent history shows weak cash flow outlook",
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      "kind": "callout",
      "text": "Bull: \"Superior FCF Conversion\"\nBear: Inferior FCF. Overstated by not consolidating JV capex, factoring of receivables, and aggressive marking of acquisition goodwill and intangibles for tax deductions",
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      "kind": "callout",
      "text": "Bull: \"Attractive Valuation\"\nBear: Three recent directors sold at $79 - $80/sh. Trades at a large premium to peers for a few percentage points of organic growth of suspect quality and sustainability",
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      "kind": "callout",
      "text": "Bull: \"Widening Org(anic) Sales Gap vs. Peers\"\nBear: Aggressive price increases announced in Q3'18 set to lapse. Undisclosed acquisitions juicing organic growth and financial control issues with acquisition contributions raises cause for concern about management's reported organic growth",
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      "kind": "framework",
      "text": "Edging Estimates and PT Higher as CHD Remains a Core Holding: We tweak our FY19-21 EPS estimates higher by ~1% and increase our PT to $86 after CHD's strong 2Q and raised FY19 outlook. CHD now trades at ~25.5x NTM EV/ULFCF, which is relatively in-line w/ HPC peers despite superior growth/fundamentals. Key tenets of our Buy rating remain: (i) widening org sales gap vs. peers; (ii) strong mgmt; (iii) best-in-class M&A optionality (as target or acquirer); (iv) high EPS visibility (CHD has delivered/beaten its EPS guidance since at least '04); (v) ~115% FCF conversion (peers ~100%); (vi) SPD/Intl. contribution (< 25% sales drive ~50% of CHD's LT org sales target); and (vii) attractive valuation.",
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      "kind": "paragraph",
      "text": "While most analysts are Hold / Market perform, a select few are bullish, and see upside to the mid $80s. One such analyst is Jefferies, with an $86 price target. We've deconstructed the \"Key Tenants\" of its Buy rating.",
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      "kind": "title",
      "text": "\"Bull Case\" Rests on Misguided Assumptions",
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      "matchId": "04b67085-1238-44a3-a7f9-dc849bb4b4c7",
      "evidence": "Systematic rebuttal of seven points from a bullish analyst report.",
      "confidence": 0.9
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      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Solution",
      "beatSlug": "problem-agitate-solution-solution-provide-relief",
      "evidence": "The solution is implicitly presented through valuation tables and comparisons, suggesting a sell opinion to mitigate downside risk.",
      "position": 2,
      "confidence": 0.8,
      "parentBeatName": "Resolution",
      "parentBeatSlug": "resolution"
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  "loops": [
    {
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      "from": 1,
      "name": "Cost Of Inaction",
      "slug": "27-cost-of-inaction",
      "bestFor": "Urgent budget requests, compliance, risk mitigation",
      "matchId": "d8d41695-ad33-43d2-9478-d227476d9e68",
      "evidence": "The overall thesis implies that failing to act on Spruce Point's analysis could lead to significant financial losses for investors holding onto CHD stock.",
      "position": 2,
      "objective": "The cost of not selling CHD",
      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
      "confidence": 0.6,
      "description": "Quantify what happens if the audience does nothing"
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