Amcor – adding growth

Amcor (AMC.ASX) acquired Sonoco’s North American rigid plastics operation for $280m. The acquisition will be EPS accretive by 2 – 3%.  Amcor management expects to save $20m+ in synergy benefits.

FY17 Amcor should generate revenue of USD$9.7b, EBIT USD$1.1b, EPS growth of 8% and DPS of USD$0.44, placing the stock on a forward yield of 3.8%

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We like AMC and see this as a suitable buy-write candidate for client portfolios. The stock trades ex-dividend tomorrow AUD$0.29.

Buy today and sell $17.00 calls into January.

AMC

 

Author: Leon Hinde

Leon has been working in the financial services industry for 18 years in management and advisory roles. Leon has extensive experience in general advice and dealings involving securities and derivative financial products.

PS 146 Securities & Derivatives, ADA 1 & 2 accreditation, Responsible Manager Certificate. Leon is authorised to provide financial product advice and deal with respect to the following financial products:

· Deposit Products
· Securities
· Derivatives
· Interest in managed investment schemes; and
· Government debentures, bonds and stocks