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Gift Boxes: Profits in the Packaging Industry

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‘Tis the season of shipping, shopping and sharing (and using the term "‘tis").  Of course, each of these activities usually requires an item be carefully wrapped, perhaps with some additional festive flair, which is a fitting introduction to an industry which has been "present"-ing quite a few surprises recently.

Nine companies make up the Containers – Paper/Plastic sector of the Zacks Industry Rank, gaining 8 positions in the last week.  The industry now holds a rank of #28 out of 260 ranked industries. 

With 9 positive earnings revisions and only 2 negative, every company in this sector, save one, has had their Zacks Rank revised upward.  Averaging positive Earnings per Share (EPS) surprises of +33%, it’s apparent that things are looking merry, even if the Christmas tree is destined to be a corrugated box.

With online shopping/shipping taking over retail sales, demand has been strong.  Add to this viral images like Amazon’s (AMZN - Free Report) package-delivering helicopter drones, and the future of the packaging industry seems “air apparent.”

Below are two companies which have moved into the prime position of a Zacks Rank #1 (Strong Buy) from a “Buy” rating.  With projected prices still sitting comfortably above current market value, there may still be time to ride an exceptional year a bit longer.  EPS surprises are expected to continue, and factoring in individual performance while analyzing and industry’s strength is beneficial in determining your investment strategy.

It’s well understood that young children and pets often prefer the packaging to the actual present.  Maybe they’re onto something.

Packaging Corp. of America (PKG - Free Report)

PKG was upgraded to a Zacks Rank #1 (Strong Buy) last week from #2 (Buy).

Packaging Corp. of America is one of the largest producers of containerboard in the United States and also one of the largest manufacturers of corrugated packaging products. The company produces corrugated containers as well as the containerboard used to manufacture corrugated containers.

PKG pays a dividend of 2.57% and its last earnings surprise was 2.25% with expected EPS growth of 15.24%.  It reports its next earnings on January 28, 2014.

Sealed Air Corp. (SEE - Free Report)

SEE is a Zacks Rank #1 (Strong Buy).  It moved up from a Zacks Rank #2 (Buy) last week.  This company reports quarterly earnings on February 18, 2014.

Sealed Air Corporation is a global leader in performance solutions for food, protective and specialty packaging. They offer a broad range of differentiated products to a diverse set of markets.  Their portfolio consists of widely recognized brands, including Cryovac® brand food packaging solutions, Bubble Wrap® brand cushioning and Diversey™ cleaning and hygiene solutions

SEE pays a dividend of 1.63% and its last earnings surprise was 14.71%.

In-Depth Zacks Research for the Tickers Above

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Packaging Corporation of America (PKG) - free report >>, Inc. (AMZN) - free report >>

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