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Sonoco (SON) Hits 52-Week High: What's Driving the Stock?
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Shares of Sonoco Products Company (SON - Free Report) crafted a 52-week high of $57.64 during intra-day trading, finally closing lower at $57.16 on Sep 12.
The company has a market cap of $5.7 billion. Over the past three months, its average volume of shares traded has been approximately 422K. Also, Sonoco surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average positive earnings surprise being 3.06%.
Moreover, Sonoco’s positive estimate revisions reflect optimism in the company’s potential, as earnings growth is often an indication of robust prospects. Estimates for the company moved up over the past 60 days, reflecting analysts’ bullish sentiments. The earnings estimate for 2018 has gone up 1.5%, while that of 2019 climbed 1.2%.
Notably, the stock has rallied 18% in a year’s time, higher than the S&P 500’s gain of 16%. Additionally, Sonoco has outperformed the industry which gained 3% during the same time frame.
Investors are optimistic on this Zacks Rank #3 (Hold) company, backed by its focus on Grow and Optimize strategy, pricing initiatives, solid second-quarter 2018 results and improved 2018 guidance.
In addition, Sonoco has an impressive VGM Score of B. In this, V stands for Value, G for Growth and M for Momentum, and the score is a weighted combination of these three scores. Such a score eliminates the negative aspects of stocks and selects winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM Score.
Our research shows that stocks with Style Scores of A or B, when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3, offer the best investment opportunities.
What Led to the 52-Week High?
Sonoco reported strong results in the second quarter, wherein adjusted earnings increased 31% year over year and came at the higher end of management’s guided range. Earnings benefited from growing diversified mix of global packaging businesses. It also beat the Zacks Consensus Estimate. Sonoco’s net sales grew 10% year over year, surpassing the Consensus mark. This upswing was driven by acquisitions, volume growth, positive foreign-exchange impact and higher selling prices.
For full-year 2018, Sonoco’s adjusted earnings per share guidance is at $3.27-$3.37, which reflects year-over-year growth of 19% at the mid-point.
Sonoco is on track to implement its Grow and Optimize strategy in 2018. The company remains focused on targeted acquisitions and development of new products. It will continue to focus on optimizing businesses through process improvement, standardization, cost control and commercial excellence. Its focus on thermoformed plastics, flexible packaging and consolidating industrial opportunities, particularly in the emerging markets, will also aid growth.
Sonoco will also gain from its pricing initiatives to combat inflation. It has successfully hiked prices of tubes, cores and paper lately. Even in Europe, where pricing has been difficult for many years, the paper system has tightened up, allowing for price increases. This will drive its sales and margin performance.
The above-mentioned tailwinds have raised investors’ optimism in the stock and are anticipated to drive the company’s share price in the days ahead.
Grainger has a long-term earnings growth rate of 12.5%. Its shares have appreciated 109%, over the past year.
iRobot Corporation has a long-term earnings growth rate of 21%. The company’s shares have gained 32% during the same time frame.
Atkore International has a long-term earnings growth rate of 10%. The stock has rallied 43% in a year’s time.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Sonoco (SON) Hits 52-Week High: What's Driving the Stock?
Shares of Sonoco Products Company (SON - Free Report) crafted a 52-week high of $57.64 during intra-day trading, finally closing lower at $57.16 on Sep 12.
The company has a market cap of $5.7 billion. Over the past three months, its average volume of shares traded has been approximately 422K. Also, Sonoco surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average positive earnings surprise being 3.06%.
Moreover, Sonoco’s positive estimate revisions reflect optimism in the company’s potential, as earnings growth is often an indication of robust prospects. Estimates for the company moved up over the past 60 days, reflecting analysts’ bullish sentiments. The earnings estimate for 2018 has gone up 1.5%, while that of 2019 climbed 1.2%.
Sonoco Products Company Price and Consensus
Sonoco Products Company Price and Consensus | Sonoco Products Company Quote
Price Performance
Notably, the stock has rallied 18% in a year’s time, higher than the S&P 500’s gain of 16%. Additionally, Sonoco has outperformed the industry which gained 3% during the same time frame.
Investors are optimistic on this Zacks Rank #3 (Hold) company, backed by its focus on Grow and Optimize strategy, pricing initiatives, solid second-quarter 2018 results and improved 2018 guidance.
In addition, Sonoco has an impressive VGM Score of B. In this, V stands for Value, G for Growth and M for Momentum, and the score is a weighted combination of these three scores. Such a score eliminates the negative aspects of stocks and selects winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM Score.
Our research shows that stocks with Style Scores of A or B, when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3, offer the best investment opportunities.
What Led to the 52-Week High?
Sonoco reported strong results in the second quarter, wherein adjusted earnings increased 31% year over year and came at the higher end of management’s guided range. Earnings benefited from growing diversified mix of global packaging businesses. It also beat the Zacks Consensus Estimate. Sonoco’s net sales grew 10% year over year, surpassing the Consensus mark. This upswing was driven by acquisitions, volume growth, positive foreign-exchange impact and higher selling prices.
For full-year 2018, Sonoco’s adjusted earnings per share guidance is at $3.27-$3.37, which reflects year-over-year growth of 19% at the mid-point.
Sonoco is on track to implement its Grow and Optimize strategy in 2018. The company remains focused on targeted acquisitions and development of new products. It will continue to focus on optimizing businesses through process improvement, standardization, cost control and commercial excellence. Its focus on thermoformed plastics, flexible packaging and consolidating industrial opportunities, particularly in the emerging markets, will also aid growth.
Sonoco will also gain from its pricing initiatives to combat inflation. It has successfully hiked prices of tubes, cores and paper lately. Even in Europe, where pricing has been difficult for many years, the paper system has tightened up, allowing for price increases. This will drive its sales and margin performance.
The above-mentioned tailwinds have raised investors’ optimism in the stock and are anticipated to drive the company’s share price in the days ahead.
Stocks to Consider
Some better-ranked stocks in the same sector are W.W. Grainger, Inc. (GWW - Free Report) , iRobot Corporation (IRBT - Free Report) and Atkore International Group Inc. (ATKR - 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.
Grainger has a long-term earnings growth rate of 12.5%. Its shares have appreciated 109%, over the past year.
iRobot Corporation has a long-term earnings growth rate of 21%. The company’s shares have gained 32% during the same time frame.
Atkore International has a long-term earnings growth rate of 10%. The stock has rallied 43% in a year’s time.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>