Berry Global Group, Inc. BERY recently underlined its participation in the fight against the deadly coronavirus. Notably, as a major manufacturer and distributor of nonwoven specialty materials, the company holds an important place in the supply chain for healthcare materials.
At the end of January 2020, the company had prioritized the production of nonwoven healthcare products in Nanhai and Suzhou facilities, based in China. As noted, it also shifted its capacity in the United States for delivering maximum output to cater to the growing demand for healthcare materials. In addition, the company noted that its meltblown production line is running at full capacity in Europe for the production of materials required for face masks and other healthcare applications like materials utilized in blood filtration.
Additionally, the company announced that it has commercialized its new Spinlace production line, based in Mooresville, North Carolina. It noted that this state-of-the-art asset has been functioning at full production rates, offering the company an additional annual capacity of 17,000 metric tons to the marketplace.
Coronavirus, officially named as COVID-19, is currently threatening the economies throughout the world. Notably, the virus originated in Wuhan, China and has spread in a minimum of 80 countries, including South Korea, Italy and Iran. In fact, fatal cases have been reported to cross the 3,200 mark, while an increasing number of infected cases are being recorded on a daily basis.
Existing Business Scenario
Berry Global has been strengthening its product portfolio and leveraging business opportunities through the addition of assets. Notably, in July 2019, the company acquired RPC Group, which has been enhancing its growth opportunities by creating a leader in the plastic and recycled packaging industry. Notably, in first-quarter fiscal 2020 (ended Dec 28, 2019), the buyout added 38.4% to sales. As a matter of fact, the company expects this deal to generate annual cost synergies of $150 million, with half of it expected to be realized in fiscal 2020 (ending September 2020).
However, the company is experiencing a soft operational performance across its Engineered Materials segment due to lower organic sales and fall in selling prices. Also, its Health, Hygiene & Specialties segment has been witnessing soft organic sales on account of divestiture of its SFL business and customer product transitions in hygiene. The company expects these headwinds to persist in the near term.
In the past six months, this Zacks Rank #3 (Hold) stock has lost 15.3%, narrower than the industry’s decline of 17.3%.
Stocks to Consider
Some better-ranked stocks from the Zacks Industrial Products sector are Sharps Compliance Corp. SMED, Tetra Tech, Inc. TTEK and Dover Corporation DOV. While Sharps Compliance sports a Zacks Rank #1 (Strong Buy), Tetra Tech and Dover carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sharps Compliance’s positive earnings surprise in the last reported quarter was 100.00%.
Tetra Tech pulled off positive earnings surprise of 8.31%, on average, in the trailing four quarters.
Dover delivered positive earnings surprise of 5.36%, on average, in the trailing four quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Tetra Tech, Inc. (TTEK) : Free Stock Analysis Report
Dover Corporation (DOV) : Free Stock Analysis Report
Sharps Compliance Corp (SMED) : Free Stock Analysis Report
Berry Global Group, Inc. (BERY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research