Why Berry Plastics is Poised to Plunge


Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, plastic consumer packaging company Berry Plastics Group has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Berry Plastics, and see what CAPS investors are saying about the stock right now.

Berry Plasticsfacts

Headquarters (founded)

Evansville, Ind. (1967)

Market Cap

$1.3 billion


Rubber and plastics

Trailing-12-Month Revenue

$4.8 billion


Chairman/CEO Jonathan Rich

President/COO Randall Becker

Trailing-12-Month Return on Capital



$87.0 million / $4.5 billion




Reynolds Food Packaging

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 67% of the 15 members who have rated Berry Plastics believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star BlacknGold, succinctly summed up the bear case for our community:

The recent IPO vaulted Berry Plastics to a market cap of $1.75 billion. While the company raised somewhere around $470 million it has a long way to go before gaining much needed financial flexibility. ... You have to figure there is an enormous amount of competition in the plastic molding/blowing space.

I'll keep an eye on Berry because they do rake in nearly $5 billion in revenue each year. Not much of that goes to net income (a microscopic 0.04% profit margin), but perhaps that just means there is plenty of room for improvement?

A very different company with a much brighter future is Kraton Performance Polymers which designs plastic/polymer resins for many high-value applications -- one of which could transform the asphalt industry.

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The article Why Berry Plastics is Poised to Plunge originally appeared on Fool.com.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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