The way I approach the markets, I want to find not only the right
companies, but the right companies trading at the right price. I have no
qualms at all that Silgan (SLGN)
fits into the first bucket. I also don't dispute the idea that the
company can, over time, grow its closures business and build its
presence in emerging markets. The dent in the can today is valuation - I
just cannot find a reasonable basis by which Silgan shares are cheap
today.
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Silgan's Great, But The Price Isn't
Showing posts with label Crown Holdings. Show all posts
Showing posts with label Crown Holdings. Show all posts
Monday, December 30, 2013
Friday, January 4, 2013
Investopedia: With Ball Corp, Quality Doesn't Come Cheap
It's always a great thing to acquire the shares of a quality company at a discount to their long-term fair value. Unfortunately, those opportunities are not all that common; while it's my experience that there's always some
quality companies trading below fair value, an investor may have a long
wait when it comes to particular companies. To that end, while I
believe Ball Corp (NYSE:BLL) is a fine company, and maybe the best in packaging, today's valuation doesn't look like any particular bargain.
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Friday, December 28, 2012
Investopedia: Can Silgan Balance Ongoing Returns Of Capital With Building For The Future?
It's hard to argue that Silgan (Nasdaq:SLGN) doesn't have a very attractive business with pretty significant barriers to entry.
Silgan has a better than 50% share in North American can markets, and
likewise substantial share in its closures business. What's more, other
competitors like Ball (NYSE:BLL), Crown Holdings (NYSE:CCK) and Berry Plastics (NYSE:BERY)
tend towards the rational when it comes to pricing. Couple that with a
strong emphasis on returning capital to shareholders (with dividends and
buybacks), and you have what looks like a strong company.
The question with Silgan, though, is the extent to which it can adapt with the times. As food producers have switched from glass to plastic, I expect the same to happen over time with metal. While Silgan can offset some of that with expansion into emerging markets, I have to ask whether the company also needs to grow beyond metal cans to maintain its long-term earnings power.
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The question with Silgan, though, is the extent to which it can adapt with the times. As food producers have switched from glass to plastic, I expect the same to happen over time with metal. While Silgan can offset some of that with expansion into emerging markets, I have to ask whether the company also needs to grow beyond metal cans to maintain its long-term earnings power.
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Friday, December 7, 2012
Seeking Alpha: Can Labelmaker Multi-Color Make The Leverage Stick?
Multi-Color (LABL)
is the sort of obscure small-cap company that I love; the company's
products are ubiquitous and essential (product labels), but nobody
really ever thinks about them. What's more, Multi-Color is a good play
not only on the overall volume growth of consumer goods, but also on the
increasing sophistication of labels and the very fragmented nature of
the industry. While Multi-Color is not a very liquid or well-covered
stock, I believe patient investors will be impressed with what this
company becomes over the next three, five, or 10 years.
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Can Labelmaker Multi-Color Make The Leverage Stick?
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Can Labelmaker Multi-Color Make The Leverage Stick?
Wednesday, October 10, 2012
Investopedia: Alcoa Is A Potential Value Call
Alcoa (NYSE:AA)
is looking like a pretty good example of a company that is doing a lot
of the right things internally, but can't make much objective progress
in the face of significant industry and economic headwinds. Alcoa seems
better positioned than Noranda (NYSE:NOR), Century Aluminum (Nasdaq:CENX) or Rio Tinto (NYSE:RIO),
and the stock is trading below historical forward multiples, but it
seems hard to imagine the stock really moving until aluminum prices
improve.
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Wednesday, February 29, 2012
Investopedia: Wait For Silgan To Get A Little Cheaper
The trouble with consistent performance is that you can't really justify paying a little extra for a stock with the idea that outperformance will redeem that premium over time. Silgan (Nasdaq:SLGN) is definitely one of the best-run packaging companies out there, but it's a stock that pretty much has to be bought right to work out. Consequently, while Silgan is a good name to follow right now, investors new to the name should hold out for a better price before taking the leap.
Business More or Less OK
Although the fourth quarter highlighted some issues in unit volume growth and margins in the plastics business, business at Silgan is more or less going as expected.
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Business More or Less OK
Although the fourth quarter highlighted some issues in unit volume growth and margins in the plastics business, business at Silgan is more or less going as expected.
Read more here:
http://stocks.investopedia.
Friday, October 21, 2011
Investopedia: Coca-Cola - A Great Company, An Iffy Stock
All of the paeans to Coca-Cola (NYSE:KO) have some basis in truth. Coca-Cola is indeed a remarkable company and a living case study in the value of strong brands and knowing the customer's tastes and expectations. But Coca-Cola is not necessarily the safe stock that everyone assumes it to be. While Coca-Cola will certainly be around for decades to come, paying too much for even a great company's stock can erode a lot of the safety that is supposed to go with the strategy.
A Respectable Third Quarter
Coca-Cola basically did as analysts expected it would in the third quarter. Reported revenue rose 45% this quarter, with the overwhelming majority of that "growth" coming from the addition of Coca-Cola Enterprises (CCE). Global case volume growth was about 4% and factor in some modest price increase, Coca-Cola's organic growth rate looks like it was in the range of 6-8%. Encouragingly, while growth in North American remains sluggish (not unlike what rival PepsiCo (NYSE:PEP) has reported), emerging market growth is pretty healthy and especially good in Latin America.
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A Respectable Third Quarter
Coca-Cola basically did as analysts expected it would in the third quarter. Reported revenue rose 45% this quarter, with the overwhelming majority of that "growth" coming from the addition of Coca-Cola Enterprises (CCE). Global case volume growth was about 4% and factor in some modest price increase, Coca-Cola's organic growth rate looks like it was in the range of 6-8%. Encouragingly, while growth in North American remains sluggish (not unlike what rival PepsiCo (NYSE:PEP) has reported), emerging market growth is pretty healthy and especially good in Latin America.
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Wednesday, August 31, 2011
Investopedia: Industry At A Glance - Packaging
Packaging is scarcely ever noticed, but it is everywhere. A quick trip to the supermarket or pharmacy will show not only the ubiquity of packaging products, but the wide scope of form and function that is available to food, beverage, personal care and healthcare companies. There is certainly a cyclical aspect to the packaging industry and input costs are always significant, but investors may want to give this industry more than just a passing thought. There are certainly some interesting companies out there today and some of these stocks could be interesting at current values.
Ball Corp (NYSE:BLL)
Ball Corp is quite simply the world's largest metal beverage container manufacturer, with about 40% share (rivals Crown Holdings (NYSE:CCK) and Rexam have roughly 20% share each). Ball's customer list is largely a roster of who's who in the beverage industry - soft drink makers like Coca-Cola (NYSE:KO) and PepsiCo (NYSE:PEP), as well as brewers like Anheuser-Busch InBev (NYSE:BUD). Ball Corp certainly has some vulnerability to higher metal prices, but the company's market position is such that it can pass on at least some of this to its customers. The bigger threat to Ball Corp may be substitution, as plastic containers make further inroads into the beverage sector.
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Ball Corp (NYSE:BLL)
Ball Corp is quite simply the world's largest metal beverage container manufacturer, with about 40% share (rivals Crown Holdings (NYSE:CCK) and Rexam have roughly 20% share each). Ball's customer list is largely a roster of who's who in the beverage industry - soft drink makers like Coca-Cola (NYSE:KO) and PepsiCo (NYSE:PEP), as well as brewers like Anheuser-Busch InBev (NYSE:BUD). Ball Corp certainly has some vulnerability to higher metal prices, but the company's market position is such that it can pass on at least some of this to its customers. The bigger threat to Ball Corp may be substitution, as plastic containers make further inroads into the beverage sector.
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Wednesday, July 13, 2011
Investopedia: Things Should Get Better For Alcoa
Aluminum may not get the same highfalutin title as copper ("Dr. Copper"), but it is nevertheless a resource with a price that is highly sensitive to economic conditions. With the economy starting to stumble and stagger during the past quarter, perhaps it is no surprise that the stock of aluminum giant Alcoa (NYSE:AA) has gone nowhere fast. Still, Alcoa's core markets are holding up well, and patient investors may yet see this investment work out.
A Mixed Bag in the Second Quarter
As seems to be so common these days, quarterly results here were a mixed bag. Alcoa did alright on the top line, with revenue up 11% sequentially on 6% expansion in pricing. Packaging, building and transportation markets were up by double-digit percentages, while growth in industrial, aerospace, turbine and auto demand was more modest.
Margins saw some pressure, though, as currency, electricity, oil and other material costs pressured results. Still, adjusted EBITDA looked strong, and reported income from continuing operations was still positive on a sequential basis. (For related reading, see Using Base Metals As An Economic Indicator.)
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A Mixed Bag in the Second Quarter
As seems to be so common these days, quarterly results here were a mixed bag. Alcoa did alright on the top line, with revenue up 11% sequentially on 6% expansion in pricing. Packaging, building and transportation markets were up by double-digit percentages, while growth in industrial, aerospace, turbine and auto demand was more modest.
Margins saw some pressure, though, as currency, electricity, oil and other material costs pressured results. Still, adjusted EBITDA looked strong, and reported income from continuing operations was still positive on a sequential basis. (For related reading, see Using Base Metals As An Economic Indicator.)
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Monday, June 20, 2011
Investopedia: Silgan Sees A Good Deal Crumple
Investors had many good reasons to be enthusiastic about Silgan's (Nasdaq:SLGN) announced merger with Graham Packaging (NYSE:GRM). Not only was the company in place to benefit from significant operating synergies and tax benefits, Graham would have given the company an invaluable plastics packaging business - an increasingly important consideration in a world that seems to be moving away from Silgan's traditional metal packaging.
Unfortunately, Silgan was not the only company to see value in Graham's assets. New Zealand-based Reynolds Group Holdings came in near the eleventh hour and made a counter-offer that Graham's board could not refuse.
The New Deal
Graham informed Silgan and the market that another bidder had emerged and offered $25 in cash for each share of Graham Packaging. That was a significant improvement over the deal Silgan offered - a deal that had been worth about $19.56 at the time of the agreement, but one that incorporated a significant Silgan equity component (meaning that the actual deal value changed every day with Silgan's share price). On a fair like-for-like basis and considering Silgan's share price, Reynolds' offer was ultimately about 14% better and had the added benefit of being an all-cash deal.
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Unfortunately, Silgan was not the only company to see value in Graham's assets. New Zealand-based Reynolds Group Holdings came in near the eleventh hour and made a counter-offer that Graham's board could not refuse.
The New Deal
Graham informed Silgan and the market that another bidder had emerged and offered $25 in cash for each share of Graham Packaging. That was a significant improvement over the deal Silgan offered - a deal that had been worth about $19.56 at the time of the agreement, but one that incorporated a significant Silgan equity component (meaning that the actual deal value changed every day with Silgan's share price). On a fair like-for-like basis and considering Silgan's share price, Reynolds' offer was ultimately about 14% better and had the added benefit of being an all-cash deal.
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