1. Berry Global Group Inc. (NYSE:BERY)
Number of Hedge Fund Holders: 43
Berry Global Group Inc. (NYSE:BERY) is a leading manufacturer and supplier of a wide variety of plastic products used across numerous consumer and industrial applications. Its extensive portfolio includes rigid packaging solutions, nonwoven materials, and healthcare and hygiene products. Berry Global Group Inc. (NYSE:BERY) operates across the globe, serving customers in North America, Europe, Asia, and South America.
Berry Global Group Inc.’s (NYSE:BERY) Q2 2024 financial results met expectations. The company managed to work around extended weak macroeconomic demand and continued inflation in key raw materials at the start of fiscal 2024.
During the quarter, Berry Global Group Inc. (NYSE:BERY) also bought back 1.4 million shares amounting to $81 million. The company retained authorization to repurchase $354 million worth of shares by the end of the quarter.
Furthermore, Berry Global Group Inc. (NYSE:BERY) implemented structural improvements across its operations. The company raised its original cost savings target from $140 million to $165 million. The management anticipates a $55 million contribution from the program during this year and another $25 million in the next year.
Analysts are showing interest in the stock with a leaning toward a “Buy,” rating. The average price target of $72.8 reflects a potential upside of over 20% from the current price levels.
Here’s what Blue Tower Asset Management said about Berry Global Inc. (NYSE:BERY) in its Q1 2024 investor letter:
“On the other extreme are the “boring” companies. These companies are boring not because their products or services are necessarily boring. Rather, this refers to them being a stable, defensible company with limited potential upside. On average, these companies tend to be undervalued and give superior returns when compared with “lottery ticket” stocks. Companies that produce consumer staples that are insensitive to the market cycle are an example of these boring, low volatility companies. Low volatility stock returns tend to be higher than high volatility stock returns even though we would expect the opposite from the efficient market hypothesis6. An example of a company that fits this model from our portfolio is the plastics manufacturer, Berry Global Group, Inc. (NYSE:BERY). Berry is the low-cost producer of plastic packaging in the United States. As the dominant, mature company in a slow-growth industry, there is relatively little chance of a dramatic short-term growth in the company’s stock. However, the company trades at a very cheap valuation and has been steadily profitable and growing over the past decade. With our expectations for its forward rate of return, we believe Berry makes a great contribution to the portfolio even if it may be “boring”.”
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