Here’s Why Daimler is NOT a Better Investment than Nestle

Here’s Why Daimler is NOT a Better Investment than Nestle is another great post by Jimbo over at

Whenever I want a good laugh I read the Economist!!!!!

Liquidity moves markets!

Follow the money. Find the profits! 

I just read an entertaining article how Daimler is a better investment than Nestle.

I beg to differ!!!!!

Daimler has basically no free cash flow and is increasing its debt to pay its over generous dividend and to cover CAPEX.

(Coyote Cliff ETF candidate anyone?????}

It will have to eliminate its dividend.

What will happen to the stock then.

Two words…..Kraft…..Heinz.

Nestle generates $11 Billion in free cash flow a year very consistently.

It has quite a wide moat that protects is free cash flow.

Stock about 30% overvalued but still valuable.

Why is all this so????

Because Daimler has to spend  $10 billion a year on CAPEX while Nestle only spends $4 billion a year.

Its just a much more structurally superior business.

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Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish, and was lead analyst for Sure Money Investor. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both analytical and sales capacities. Prior to starting the Wall Street Examiner I worked as a commercial real estate appraiser in Florida for 15 years. I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. My perspective is not of the Ivory Tower. It is from having my boots on the ground and in the trenches of the industries that I analyze and write about today. 

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