When talking of rubber and plastic stocks, the first name that comes to mind is Goodyear Tire & Rubber (NYSE:GT). However, other mid-tier stocks stand out, which can be solid investment plays.
One such play is Berry Plastics (NYSE:BERY), valued at $2.1 billion. In the past four quarters, the company generated sales of $4.7 billion and turned in EBITDA of $726 million.
However, what might raise eyebrows is the $3.9 billion debt, and even the efforts to refinance $1 billion debt maturing in 2016 doesn’t look like a step in the right direction. What investors should know is that this kind of leverage is typical in the plastics industry. Interestingly Berry Plastics can generate top and bottom line consistent to handle its debt load.
Despite margins being thin, this could be a good thing for a levered company such as Berry Plastics. If refinancing makes its debt cheaper in any way, it can boost the bottom line. The stock might be profitable than the credit it is receiving, and it is one to keep an eye on.
Editor in Chief.
Living in the era of dynamic tech change Alex decided to stay tuned in changes that make any person find comfort and adapt to new devices. Furthermore, gaming became his passion for spending leisure time with his close ones. Although, he has a degree in Business Administration (majoring in Finance) writing for technology and as well as finance has been one of the precious aspects of his life