The company's competitors trade at a range of multiples and have different leverage levels. Thus the stock offers 30% upside from the current $49 price. This would amount to 12x forward EPS, which again seems to be reasonable. With the market trading at a 30x multiple and the 30 year Treasury at a 60x multiple, I feel that this is appropriately conservative given the company's business, growth and debt load.
#ANCORA BERRY FREE#
Valuation: Fair value of $65 for the stockĪt a mere 10x free cash flow, the stock would be worth $65.
With less than 30% of its operating profit currently going towards debt service, I believe the company is close to deleveraging to a comfortable position that would allow it to consider directing its free cash flow towards dividends or a share buyback. Its weighted average cost of debt is 3.75%. It recently issued 3 year debt at an interest rate of less than 1%. The company has a market cap of $6.7 billion and $10 billion of debt, which some may find disconcerting. The consensus estimate is for the company to earn $5.37 per share this fiscal year ending September, which is consistent with the financial guidance the company has provided. It used all this to repay debt.įor 2021, the company expects similar financial performance and cash flow, with organic volume growth of 2%. The company generated $900 million of free cash flow or close to $7 per share.
I would not give them a pass on these, but believe that most of the amortization of intangibles of $300 million is a valid add-back. The company calculated an adjusted net income per share of $4.85 after adding back certain expenses like restructuring charges. This amounted to $4.14 for each of the 135 million diluted shares. After $400 million of interest expense, the company had $700 million of pre-tax income and $560 million after taxes. Organic revenue was roughly flat YoY, with some volume increases offset by lower prices from pass-through of lower resin costs. In July 2019, the company completed the acquisition of RPC Group for $6.1 billion, which significantly increased the size of the company.įor the fiscal year ended September 2020, the company reported $11.7 billion in revenue and $1.2 billion in operating income. 53% of revenue is in North America, 36% in Europe and 11% in the rest of the world. There is not much supplier or customer concentration. The primary raw material that the company uses is plastic resin. The company's competitors include Amcor ( AMCR), Silgan ( SLGN), AptarGroup ( ATR), Reynolds ( REYN), Intertape ( OTCPK:ITPOF), 3M ( MMM), Tredegar ( TG), Avgol and Fitesa. Health, Hygiene & Specialties: Manufactures material for medical garments, surgical drapes, cleaning wipes, face masks, diapers, dryer sheets and filtration products. 24% of revenue, 27% of operating income.Įngineered Materials: Manufactures stretch films, sealant films, trash can liners, tapes and agricultural films.
36% of revenue, 25% of operating income.Ĭonsumer Packaging North America: Manufactures containers, beverage cups, lids, bottles, vials and tubes. It operates in the following segments:Ĭonsumer Packaging International: Manufactures dispensing systems, inhalers, bottles, vials, films, containers, lids and molds. The company is headquartered in Evansville, Indiana and has operations all over the world. I believe its shares have 30% upside to fair value. The company is growing earnings and rapidly deleveraging using its strong cash flow. As a maker of materials that go into medical garments, cleaning wipes and face masks, it has benefited to some degree, offsetting lower food service demand. With most technology stocks trading at more than 30x earnings and even moribund retailers skyrocketing, are there any cheap stocks left in the market? Surprisingly, I found one that trades at a single digit multiple of earnings and free cash flow.īerry Global ( NYSE: BERY) is a diversified plastics and packaging maker that has been unaffected by the pandemic.
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