BERY (Follow-Up)
Berry Global Group, Inc.
Industrial/Transportation
09/20/2017
Presented
| Date | 09/08/2017 |
| Price | $56.29 |
| Market Cap | $7.30B |
| Ent Value | $12.85B |
| P/E Ratio | 21.04x |
| Book Value | $6.48 |
| Div Yield | 0% |
| Shares O/S | 130.40M |
| Ave Daily Vol | 1,003,247 |
| Short Int | 1.20% |
Current
| Price | $69.98 |
| Market Cap | $8.02B |
| Berry Global Group, Inc. manufactures and distributes plastic consumer packaging and engineered materials in the United States, Canada, Mexico, Belgium, France, Spain, the United Kingdom, Italy, Germany, Australia, Brazil, Argentina, Colombia, Malaysia, India, China, and the Netherlands. The company operates through three segments: Health, Hygiene & Specialties; Consumer Packaging; and Engineered Materials. It offers containers; foodservice products, such as thermoformed polypropylene and injection-molded plastic drink cups; closures and over caps comprising continuous-thread and child-resistant closures, as well as aerosol over caps; bottle and prescription containers; and extruded and laminate tubes. The company also provides engineered materials, including corrosion protection products; and cloth and foil, splicing and laminating, flame-retardant, vinyl-coated and carton sealing, electrical, double-faced cloth, masking, mounting, OEM, and medical and specialty tapes. The companys engineered materials also consists of drop cloths and retail trash bags; polyvinyl chloride films and boxed products; trash-can liners and food bags; and stretch and shrink films. In addition, it offers flexible packaging products, such as personal care films; food and consumer films, as well as barrier films; and converter films, including coated and laminated products, as well as a range of products for the food, healthcare, and personal care markets. The company sells its products through direct sales force and distributors. The company was formerly known as Berry Plastics Group, Inc. and changed its name to Berry Global Group, Inc. in April 2017. Berry Global Group, Inc. was founded in 1967 and is headquartered in Evansville, Indiana. |
Please note, this is an update to: BERY - Long, which was originally presented on 4/20/2016 ($36.15).
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Publicly traded companies mentioned herein: Berry Global Group Inc (BERY), Newell Brands Inc (NWL)
Highlights
The presenter remains long shares of Berry Global Group (BERY), fka Berry Plastics, and sees upside to the mid-$70s for patient shareholders. At $56, the stock remains undervalued relative to its peers, and management continues to delever the balance sheet. The recent shallow pullback on concerns about rising polyethylene and polypropylene prices (which are input costs for BERY) has created an attractive entry point. With a target of sub-4x leverage by the end of fiscal 2017 (Sept year-end), there is optionality around future capital deployment. He expects BERY management to provide an update when earnings are reported in late October/ early November, and in his opinion there is “a good chance” that guidance will include some clarity around future capital allocation. Given BERY’s track record of accretive acquisitions, the presenter is confident that whatever management decides - whether it be to initiate a dividend, repurchase stock, or continue to look for M&A opportunities - “will be the right thing.”
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