Milacron Leveraged To Further Input Substitution And Emerging Markets

Milacron (NYSE:MCRN) is a sort of testament to those investors who are hardcore followers of Peter Lynch's philosophy of looking around your house and office and wondering "who makes that?". Milacron doesn't make anything you own yourself, but its plastics processing equipment is used to make a wide variety of plastic products that are used throughout the auto, packaging, consumer goods, electronics, industrial, and medical sectors.

Demand for plastics has outstripped GDP for many years running, and I expect that will continue to be the case, as OEMs substitute heavier, more expensive materials like metal with plastic wherever possible. Likewise, I expect demand to continue to grow in emerging markets like China, India, and Brazil as consumers buy more packaged goods. While Milacron's debt level is significant, future cash flows should allow the company to manage this debt while continuing to grow the business.

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Milacron Leveraged To Further Input Substitution And Emerging Markets