WRK
WestRock Co
Industrial/Transportation
04/06/2015
Presented
| Date | 03/31/2015 |
| Price | $64.50 |
| Market Cap | $9.02B |
| Ent Value | $11.81B |
| P/E Ratio | 18.9x |
| Book Value | $31.27 |
| Div Yield | 1.16% |
| Shares O/S | 0.00M |
| Ave Daily Vol | 1,350,000 |
| Short Int | 3.43% |
Current
| Price | $51.51 |
| Market Cap | $13.30B |
| WestRock Company manufactures and sells paper and packaging solutions for consumer and corrugated markets in North America, South America, Europe, and the Asia-Pacific. It offers folding cartons for use in various food and non-food applications; superior pumps, sprayers, and dispensing closures for home cleaning, healthcare, and beauty and personal care products; and corrugated containers for home appliances, electric motors, small machinery, produce, books, furniture, and other products. The company also provides beverage multipacks for beer, carbonated soft drink, and other beverage markets; merchandising displays; chipboard partitions and other protective packaging, such as custom partitions, book cover board, single ply chip, and gypsum; and coated white top linerboard, white top linerboard, virgin and recycled linerboard, corrugated medium, kraft paper, and pulp products. In addition, it offers various paperboard products, including solid bleached sulfate, coated and uncoated recycled board, and coated and uncoated unbleached kraft. Further, the company is involved in recovering, processing, and selling recycled paperboard; developing master planned communities, and industrial and business campuses, as well as recreational/investment land sales in South Carolina and Georgia; and supplying specialty chemicals products and distinctive technologies in asphalt innovations, oilfield and pine chemicals, and activated carbon. WestRock Company is based in Richmond, Virginia. |
Please note, on 6/24/15 Rock-Tenn Company (RKT) changed its company name and ticker to WestRock Company (WRK). The content of this idea will make reference to the original company name and ticker symbol.
Publicly traded companies mentioned herein: International Paper (IP), KapStone Paper and Packaging Corp (KS), MeadWestvaco Corporation (MWV), Rock-Tenn Company (RKT)
Highlights
The presenter is bullish on the outlook for Rock-Tenn (RKT) and thinks the recently announced acquisition of MeadWestvaco (which creates a $21 billion EV pro forma company) is positive for shareholders. The risk/ reward is attractive in the mid-$60s, as synergies from the deal could relatively easily surpass management’s guidance of $300 million, and the combined company will have an improved leverage profile. In addition, there is the potential for containerboard prices to increase following a wave of consolidation in the industry (the top three players will share 75% of the market once the RKT/ MWV deal closes), and there is still optionality surrounding MLP-potential.
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