Kimberly-Clark Corporation KMB

While consumer sentiment in developed markets has not improved significantly over the past several years (owing to persistently high levels of unemployment and more recently to uncertainty surrounding austerity measures and tax rates), Kimberly-Clark has been working feverishly to enhance its market position. We afford a narrow economic moat to the firm for its strong brands developed during the decades, including Huggies, Kotex, and Kleenex, but the company's product categories are extremely susceptible to consumer trade-down, particularly in the current uncertain economic climate. Kimberly's focus on restructuring its operations (for example, exiting less profitable businesses and driving efficiency improvements) is admirable, but we think it faces an uphill battle expanding its business in the U.S. and Europe for the foreseeable future.