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Bemis' (BMS) Stock Up 13% in 6 Months: Can It Gain Further?

Zacks Equity Research

Bemis Company, Inc. BMS is riding high on impressive earnings surprise history, focus on Agility plan, as well as expansion of business. Bemis' shares have outperformed its industry with respect to price performance over the past six months. The stock has gained around 13%, while the industry has recorded loss of 9%

What’s Driving Bemis?

Bemis’ initiatives to improve cost structure through the Agility plan will help fix, strengthen, and grow its business. The plan includes optimizing manufacturing capacity, consolidating office space, and reducing SG&A, as well as other costs.

It also involves the simplification of product portfolio and organizational structure, rebalancing R&D efforts, along with pursuing targeted areas of growth in the North American business. Bemis expects to realize roughly $35 million of savings from the plan.

Bemis remains focused on improving its operating performance and expansion of business. During 2018, Bemis hired new sales representatives who are encouraged to pursue and win new business targets. The company has established core specific offerings by leveraging its existing innovative product portfolio and completed customer account reviews to focus on sales efforts.



 

Solid Zacks Rank, Score Combination

Bemis carries a Zacks Rank #2 (Buy), at present. It has a VGM score of B. Here V stands for Value, G for Growth and M for Momentum. The company’s score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners. In fact, our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1(Strong Buy) or 2, make solid investment choices.

Positive Earnings Surprise History

Bemis surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average positive earnings surprise being 4.17%.

Other Stocks to Consider

Some other top-ranked stocks in the sector include Brady Corporation BRC, Owens-Illinois, Inc. OI and Alarm.com Holdings, Inc. ALRM. All three stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Brady has a long-term earnings growth rate of 7.5%. The company’s shares have gained around 23% over the past six months.

Owens-Illinois has a long-term earnings growth rate of 6.6%. Its shares have gained 12%, over the past six months.

Alarm.com has a long-term earnings growth rate of 17%. The stock has appreciated 26% over the past six months.

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