We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Inventories Reduction & Inflation to Impact Silgan Holdings
Read MoreHide Full Article
On Jun 26, we issued an updated research report on Silgan Holdings Inc. (SLGN - Free Report) . The packaging company’s results will be affected by the ongoing plan of inventories reduction and increase in debt. Recent tariff on steel and aluminum prices will also thwart its performance.
Let’s discuss the factors in detail.
Inventories Reduction to Impede Profitability
Silgan Holdings’ metal container business experienced a less favorable overhead absorption and moderately lower volumes in the first quarter resulting in lower profitability, due to planned reduction in inventories. The company’s ongoing plan of inventories reduction in 2018 will dampen its performance.
Inflation to Impact Margins
Silgan Holdings’ margin performance will be impacted in 2018 due to material cost inflation. Recent tariff on steel and aluminum prices imposed by the U.S. government will inflate manufacturing costs. The company’s results will also be thwarted by higher resin cost due to the impact of hurricanes.
Rising Debt a Concern
Silgan Holdings expects that interest expense will flare up this year due to higher average outstanding borrowings. This is due to additional borrowings for the Dispensing Systems acquisition and elevated weighted average interest rates resulting from market rate increases on variable rate debt.
Share Price Performance
Silgan Holdings has underperformed its industry with respect to price performance over the past year. The stock has lost around 15% compared to the loss of 14% incurred by the industry during the same time frame.
Zacks Rank & Key Picks
Silgan Holdings currently carries a Zacks Rank #4 (Sell).
DMC Global has a long-term earnings growth rate of 20%. Its shares have appreciated 270%, over the past year.
Actuant has a long-term earnings growth rate of 15.6%. The company’s shares have rallied 23%, in the past year.
Chart Industries has a long-term earnings growth rate of 26.9%. The stock has gained 96% in a year’s time.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Inventories Reduction & Inflation to Impact Silgan Holdings
On Jun 26, we issued an updated research report on Silgan Holdings Inc. (SLGN - Free Report) . The packaging company’s results will be affected by the ongoing plan of inventories reduction and increase in debt. Recent tariff on steel and aluminum prices will also thwart its performance.
Let’s discuss the factors in detail.
Inventories Reduction to Impede Profitability
Silgan Holdings’ metal container business experienced a less favorable overhead absorption and moderately lower volumes in the first quarter resulting in lower profitability, due to planned reduction in inventories. The company’s ongoing plan of inventories reduction in 2018 will dampen its performance.
Inflation to Impact Margins
Silgan Holdings’ margin performance will be impacted in 2018 due to material cost inflation. Recent tariff on steel and aluminum prices imposed by the U.S. government will inflate manufacturing costs. The company’s results will also be thwarted by higher resin cost due to the impact of hurricanes.
Rising Debt a Concern
Silgan Holdings expects that interest expense will flare up this year due to higher average outstanding borrowings. This is due to additional borrowings for the Dispensing Systems acquisition and elevated weighted average interest rates resulting from market rate increases on variable rate debt.
Share Price Performance
Silgan Holdings has underperformed its industry with respect to price performance over the past year. The stock has lost around 15% compared to the loss of 14% incurred by the industry during the same time frame.
Zacks Rank & Key Picks
Silgan Holdings currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the same sector include DMC Global Inc. (BOOM - Free Report) , Actuant Corporation and Chart Industries, Inc. (GTLS - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DMC Global has a long-term earnings growth rate of 20%. Its shares have appreciated 270%, over the past year.
Actuant has a long-term earnings growth rate of 15.6%. The company’s shares have rallied 23%, in the past year.
Chart Industries has a long-term earnings growth rate of 26.9%. The stock has gained 96% in a year’s time.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>