The tectonic plates of equity markets are shifting unpredictably as we get to the other side of COVID-19.
The onset of the pandemic and other factors are sowing doubts around traditional stocks and sectors once considered ‘safe’ like banks and energy companies. Meanwhile, the irony is that businesses offering certainty and growth are generally trading at steep premiums.
To help investors demystify the new world, whether assumptions need to change and where to find value, the team at Firetrail will publish in-depth wires exclusively for Livewire subscribers as part of our Analyst Series. If you want first access to this content, click on the FOLLOW button on the left. This way you will receive the report directly by email soon after it goes live.
The videos and written reports will be published monthly and will cover:
- Unpackaging packaging - Ramoun Lazar
- Oil supply and demand - Blake Henricks
- Australian banks - Scott Olsson
- Aussie tech - Eleanor Swanson
- Small-cap resources - Matthew Fist
- Consumers - Tom Kierath
Report #1 on 'Unpackaging packaging' is out soon and focuses on Amcor (ASX:AMC), which Firetrail Industrials Analyst Ramoun Lazar describes as an “inexpensive defensive”. Ramoun outlines that the packaging giant:
- Pays a ~5% dividend yield
- Generates $300m-$400m of surplus cashflow after dividends
- Operates in the high-value component of a market, driven by structural tailwinds
- Is responding to concerns around sustainability
- Trades at a relatively large discount to other defensive businesses
- Has attractive growth and cost synergy options following the acquisition of rival Bemis, which gave it the dominant position in North America
"Amcor now has a global footprint in flexible packaging, whereas previously it didn't have that North American exposure. So it's now the number one player in Europe, North America, Latin America, and the Asia Pacific. What that enables the business to do is take that offering to your global brands such as Nestle and other consumer companies like Unilever, Kraft and Pepsi and offer them a one-stop shop for packaging their products on a regional basis. We also think as the Bemis business is integrated into the Amcor fold, there will be opportunities to drive revenue synergies."
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