Markets

Validea's Top Five Basic Materials Stocks Based On John Neff - 10/20/2019

The following are the top rated Basic Materials stocks according to Validea's Low PE Investor model based on the published strategy of John Neff. This strategy looks for firms with persistent earnings growth that trade at a discount relative to their earnings growth and dividend yield.

PACKAGING CORP OF AMERICA (PKG) is a large-cap value stock in the Containers & Packaging industry. The rating according to our strategy based on John Neff is 62% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Packaging Corporation of America (PCA) is a producer of containerboard products and uncoated freesheet. The Company operates through three segments: Packaging, Paper, and Corporate and Other. The Packaging segment produces a range of corrugated packaging products. The Paper segment manufactures and sells a range of papers, including communication-based papers and pressure sensitive papers. The Company's containerboard mills produces linerboard and semi-chemical corrugating medium, which are papers primarily used in the production of corrugated products. The Company's corrugated products manufacturing plants produce a range of corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods, multi-color boxes and displays. The Company also produces packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

BERRY GLOBAL GROUP INC (BERY) is a mid-cap growth stock in the Containers & Packaging industry. The rating according to our strategy based on John Neff is 60% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Berry Global Group, Inc., formerly Berry Plastics Group, Inc., is a provider of value-added plastic consumer packaging, non-woven specialty materials and engineered materials. The Company offers products, such as closures, prescription vials, specialty films, adhesives, nonwovens, drink cups, containers and bottles. The Company operates through three segments: Health, Hygiene & Specialties, Consumer Packaging, and Engineered Materials. The Consumer Packaging segment primarily consists of containers, foodservice items, closures, overcaps, bottles, prescription vials, tubes, and printed films. The Health, Hygiene & Specialties segment primarily consists of non-woven specialty materials used in hygiene, infection prevention, personal care, industrial, construction, and filtration applications. The Engineered Materials segment primarily consists of pipeline corrosion protection solutions, tapes and adhesives, polyethylene-based film products, and specialty coated and laminated products.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E RATIO: FAIL P/E RATIO: FAIL
EPS GROWTH: PASS EPS GROWTH: FAIL
FUTURE EPS GROWTH: FAIL FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS SALES GROWTH: PASS
TOTAL RETURN/PE: PASS TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS EPS PERSISTENCE: FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

GRAPHIC PACKAGING HOLDING COMPANY (GPK) is a mid-cap growth stock in the Containers & Packaging industry. The rating according to our strategy based on John Neff is 60% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Graphic Packaging Holding Company is a provider of paper-based packaging solutions for a range of products to food, beverage and other consumer product companies. The Company's segments include Paperboard Mills, Americas Paperboard Packaging, Europe Paperboard Packaging, and Corporate and Other. The Paperboard Mills segment includes the Company's North American paperboard mills, which produce primarily coated unbleached kraft and coated recycled board. As of December 31, 2016, the Company had seven paperboard mills in North America. The Americas Paperboard Packaging segment includes paperboard folding cartons sold primarily to consumer packaged goods (CPG) companies serving the food, beverage and consumer product markets in the Americas. The Europe Paperboard Packaging segment includes paperboard folding cartons sold primarily to CPG companies serving the food, beverage and consumer product markets in Europe. The Corporate and Other segment includes the Pacific Rim operating segment.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E RATIO: FAIL P/E RATIO: FAIL P/E RATIO: FAIL
EPS GROWTH: PASS EPS GROWTH: FAIL EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS
TOTAL RETURN/PE: PASS TOTAL RETURN/PE: PASS TOTAL RETURN/PE: FAIL
FREE CASH FLOW: PASS FREE CASH FLOW: PASS FREE CASH FLOW: FAIL
EPS PERSISTENCE: PASS EPS PERSISTENCE: FAIL EPS PERSISTENCE: PASS

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

MATTHEWS INTERNATIONAL CORP (MATW) is a small-cap growth stock in the Misc. Fabricated Products industry. The rating according to our strategy based on John Neff is 60% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Matthews International Corporation is a provider of brand solutions, memorialization products and industrial technologies. The Company operates through three segments: SGK Brand Solutions, Memorialization and Industrial Technologies. The SGK Brand Solutions segment provides brand development, deployment and delivery (consisting of brand management, printing plates and cylinders, pre-media services and imaging services for consumer packaged goods and retail customers, merchandising display systems, and marketing and design services). The Memorialization segment manufactures and markets a line of memorialization products used primarily in cemeteries, funeral homes and crematories. The Industrial Technologies segment designs, manufactures and distributes a range of marking, coding and industrial automation solutions, order fulfillment systems and related consumables.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E RATIO: FAIL P/E RATIO: FAIL P/E RATIO: FAIL P/E RATIO: FAIL
EPS GROWTH: PASS EPS GROWTH: FAIL EPS GROWTH: PASS EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS
TOTAL RETURN/PE: PASS TOTAL RETURN/PE: PASS TOTAL RETURN/PE: FAIL TOTAL RETURN/PE: FAIL
FREE CASH FLOW: PASS FREE CASH FLOW: PASS FREE CASH FLOW: FAIL FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS EPS PERSISTENCE: FAIL EPS PERSISTENCE: PASS EPS PERSISTENCE: FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

OWENS-ILLINOIS INC (OI) is a small-cap value stock in the Containers & Packaging industry. The rating according to our strategy based on John Neff is 60% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Owens-Illinois, Inc. is a manufacturer of glass container products. The Company's principal product lines are glass containers for the food and beverage industries. The Company's segments include Europe, North America, Latin America and Asia Pacific. The Company produces glass containers for alcoholic beverages, including beer, flavored malt beverages, spirits and wine. The Company also produces glass packaging for a range of food items, soft drinks, teas, juices and pharmaceuticals. The Company manufactures glass containers in a range of sizes, shapes and colors. The Company also provides engineering support for its glass manufacturing operations through facilities located in the United States, Australia, France, Poland, Colombia and Peru. As of December 31, 2016, the Company had 79 glass manufacturing plants in 23 countries. The Company has a distribution facility used to import glass containers from its business in Mexico.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E RATIO: FAIL P/E RATIO: FAIL P/E RATIO: FAIL P/E RATIO: FAIL P/E RATIO: PASS
EPS GROWTH: PASS EPS GROWTH: FAIL EPS GROWTH: PASS EPS GROWTH: PASS EPS GROWTH: FAIL
FUTURE EPS GROWTH: FAIL FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS SALES GROWTH: PASS
TOTAL RETURN/PE: PASS TOTAL RETURN/PE: PASS TOTAL RETURN/PE: FAIL TOTAL RETURN/PE: FAIL TOTAL RETURN/PE: FAIL
FREE CASH FLOW: PASS FREE CASH FLOW: PASS FREE CASH FLOW: FAIL FREE CASH FLOW: PASS FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS EPS PERSISTENCE: FAIL EPS PERSISTENCE: PASS EPS PERSISTENCE: FAIL EPS PERSISTENCE: FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

Since its inception, Validea's strategy based on John Neff has returned 308.20% vs. 169.40% for the S&P 500. For more details on this strategy, click here

About John Neff: While known as the manager with whom many top managers entrusted their own money, Neff was far from the smooth-talking, high-profile Wall Streeter you might expect. He was mild-mannered and low-key, and the same might be said of the Windsor Fund that he managed for more than three decades. In fact, Neff himself described the fund as "relatively prosaic, dull, [and] conservative." There was nothing dull about his results, however. From 1964 to 1995, Neff guided Windsor to a 13.7 percent average annual return, easily outpacing the S&P 500's 10.6 percent return during that time. That 3.1 percentage point difference is huge over time -- a $10,000 investment in Windsor (with dividends reinvested) at the start of Neff's tenure would have ended up as more than $564,000 by the time he retired, more than twice what the same investment in the S&P would have yielded (about $233,000). Considering the length of his tenure, that track record may be the best ever for a manager of such a large fund.

About Validea: Validea is an investment research service that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.