We recently compiled a list of the 9 Best Plastics and Rubber Stocks to Buy. In this article, we are going to take a look at where AptarGroup Inc. (NYSE:ATR) stands against the other plastic and rubber stocks.
The global plastics and rubber products market is expected to observe consistent growth in the coming years. The market is expected to expand from $1.46 trillion in 2023 to $1.57 trillion in 2024, reflecting a healthy 7.3% annual growth rate. This positive trend is predicted to continue, with the market reaching a projected size of $2.05 trillion by 2028 at a 6.9% annual growth rate.
Several factors are fueling this growth, including the rise of manufacturing and advancements in the medical and healthcare sectors. The growing demand for tires in the automotive industry is also boosting the market. Tires, which are important for providing traction and supporting vehicle weight, depend significantly on rubber as a primary material.
For instance, a February 2023 report by the US Tire Manufacturers Association (USTMA) shared that tire shipments in the US are on an upward trajectory, rising from 332 million units in 2021 to 332.7 million units in 2022.
Recent trends in the US plastics and rubber product manufacturing sector highlight a rise in research and development (R&D) investment. Data collected by Source Advisors indicates a 19.4% increase in R&D compared to the previous year, signaling strong growth in innovation activities. The sector has invested a total of $3.1 billion in R&D, an increase from $2.6 billion the previous year. This rise in investment is double the US average for the same period.
This increase in R&D investment comes as a positive sign following a 5-year period characterized by a slump in innovation. During the slump, R&D investment in the industry declined by 16.2%. This trend has occurred in response to the evolving technological landscape and shifting consumer expectations, especially toward sustainable solutions.
Many popular companies have introduced innovative solutions through R&D efforts. For instance, Berry Global recently launched a new version of its Omni Xtra polyethylene (PE) cling film, specifically designed for fresh food applications. This innovative film serves as an alternative to traditional polyvinyl chloride (PVC) cling films and builds upon the success of the existing Omni Xtra film used in packaging various food products.
With this context in mind, let’s take a look at some of the best plastics and rubber stocks attracting investment currently.
Our Methodology
For this article, we conducted an analysis of our database of 919 hedge funds as of Q1 2024. From this dataset, we selected the best plastics and rubber stocks based on the hedge fund sentiment. The top plastics and rubber stocks have been ranked in ascending order of the number of hedge funds holding a stake in them as of the first quarter of the year. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a technician inspecting and testing a dispensing closure component.
AptarGroup Inc. (NYSE:ATR)
Number of Hedge Fund Holders: 30
AptarGroup Inc. (NYSE:ATR) is a world leader in designing and manufacturing technologies that control, dispense, and safeguard medications and everyday products. It serves a wide range of industries, from pharmaceuticals and cosmetics to food and cleaning supplies.
The company reported a strong start to 2024 with its Q1 2024 results. Sales grew 6% with core sales up 5%, while earnings per share jumped 50% to $1.23. Furthermore, adjusted earnings per share rose 31% to $1.26. Meanwhile, net income increased by 52% to $83 million, and adjusted EBITDA climbed 16% to $179 million. The dramatic rise in net income growth relative to sales growth can be attributed, in part, to efficient cost management and operational leverage improvements, which, the CEO Stephan B. Tanda says contributed to the decrease in (SG&A) expenses as a percentage of revenue relative to the previous year.
Analyst sentiment for AptarGroup’s fiscal 2024 earnings is positive, with estimates rising by 3.3% in the last 90 days. Analysts are bullish on AptarGroup’s long-term potential and have given the stock a Buy rating.
Out of the 919 hedge funds tracked by Insider Monkey, 30 reported owning stock in AptarGroup Inc. (NYSE:ATR) as of Q1 2024. Millennium Management was among the leading hedge fund investors in the company, with a stake worth over $54.9 million. The hedge fund increased its stake in the company by over 180% during the first quarter of the year.
Overall ATR ranks 7th on our list of the best plastic and rubber stocks to buy. You can visit 9 Best Plastics and Rubber Stocks to Buy to see the other plastic and rubber stocks that are on hedge funds’ radar. While we acknowledge the potential of ATR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ATR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.