5 Best Packaging Stocks to Buy Now

3. WestRock Company (NYSE:WRK)

Number of Hedge Fund Holders: 35

WestRock Company (NYSE:WRK) is next on our list of the best packaging stocks.

At the end of the March quarter 2023, 35 hedge funds owned stakes in WestRock Company (NYSE:WRK), according to Insider Monkey’s database of 943 hedge funds. These stakes have a collective value of roughly $820 million. With over 12.6 million shares, Greenhaven Associates was the company’s leading stakeholder in Q1.

SouthernSun Asset Management, LLC mentioned WestRock Company (NYSE:WRK) in its Q1 2023 investor letter. Here is what the firm has to say:

“WestRock Company (NYSE:WRK), a leading provider of corrugated and consumer packaging in the U.S., reported fiscal first quarter results that were below expectations and was a top detractor for the quarter. Strong pricing drove 1% sales growth in the corrugated packaging segment and 7% growth in the consumer packaging segment, but sales in the global paper segment declined 17% in the quarter due to weak export demand for containerboard. Consolidated EBITDA was down 4% for the quarter, impacted by weakness in the global paper segment and economic downtime taken throughout the mill system. WestRock ended its first fiscal quarter with net debt to trailing 12-months EBITDA of 2.35x, slightly above its targeted range of 1.75-2.25x, driven primarily by the acquisition of the remaining interest in Grupo Gondi. While macroeconomic weakness continues to weigh on demand for packaging, we believe WestRock operates a resilient business model with exposure to a diverse range of end markets. The business has generated over $1 billion in free cash flow in each of the last seven years, and we believe they will exceed that level again during fiscal 2023. Management has demonstrated a commitment to improving returns on capital by shuttering older, inefficient mills, selling its uncoated recycled board mills, and increasing exposure to the growing Latin American market through its acquisition of Grupo Gondi. We believe that shareholders will benefit from these efforts over the long term.”