7 Best Paper Stocks To Buy Right Now

3. Avery Dennison Corporation (NYSE:AVY)

Number of Hedge Fund Holders: 33 

Avery Dennison Corporation (NYSE:AVY) is a global materials science and digital identification solutions company that designs and manufactures adhesive labels, tags, and branding materials for industries such as retail, e-commerce, logistics, food, pharmaceuticals, and automotive.

In Q2 2024, Avery Dennison Corporation (NYSE:AVY) reported earnings per share (EPS) of $2.42, a 26% year-over-year increase. The Materials segment experienced a 6% organic sales growth, rebounding from last year’s inventory destocking, with significant volume increases in Europe and Asia. The adjusted EBITDA margin improved to 17.9%, up over two percentage points due to enhanced productivity. Meanwhile, the Solutions Group saw an 11% rise in organic sales and a 16.8% adjusted EBITDA margin, driven by increased volumes in the apparel sector and intelligent labels.

Avery Dennison Corporation (NYSE:AVY)’s free cash flow of $201 million in the first half of 2024, up by $137 million from the previous year, highlights strong financial health. This cash flow increase enhances financial flexibility, supports dividends and share buybacks, and funds growth and acquisitions. The net debt-to-adjusted EBITDA ratio of 2.2x reflects manageable debt and operational stability, allowing for potential strategic borrowing. For investors, these metrics signal robust cash generation, financial discipline, and a foundation for growth, positioning the company to deliver continued shareholder value.

Strategic investments in intelligent labels and new customer rollouts in high-value sectors like logistics and food are expected to support ongoing growth. Additionally, on April 9, Avery Dennison introduced new electrode fixing tapes for electric vehicle (EV) battery assembly, aimed at boosting sluggish sales growth.

As of Q2 2024, 33 hedge funds held stakes in the stock in the Insider Monkey database. The largest stakeholder out of these was Cartenna Capital, holding shares worth $42,636,750. The stock holds a Moderate Buy rating based on 9 Wall Street analysts. In the last three months, analysts set a 12-month price target for Avery Dennison, averaging $242.38. The forecasts range from a low of $207.00 to a high of $275.00, representing a 12.77% increase from the current price of $214.93.