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Rhizome Partners: “Berry Global (BERY) is the ‘Rodney Dangerfield’ of Value Investments”

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Jose Karlo Mari Tottoc
·3 min read
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Rhizome Partners, a long-term capital investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A net return of 18.2% was recorded by the fund for the Q4 of 2020, outperforming its S&P 500 benchmark that delivered a 12.2% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Rhizome Partners, in their Q4 2020 Investor Letter, said that Berry Global Group, Inc. (NYSE: BERY) has a potentially good investment upside. Berry Global Group, Inc. is a plastic packaging products manufacturer that currently has a $7.6 billion market cap. For the past 3 months, BERY delivered a 5.94% return and settled at $57.21 per share at the closing of February 19th.

Here is what Rhizome Partners has to say about Berry Global Group, Inc. in their Q4 2020 investor letter:

"Berry Global is the “Rodney Dangerfield” of value investments. The company recently issued $750mm worth of 2026 debt at 1.57% and used the proceeds to pay down higher coupon debt. The spread between the debt and equity yield is about 10%. Something is mispriced. In 2020, Berry had generated “bond-like” cashflows and had paid down almost $1 billion of debt. The market simply yawned. We keep hearing that institutional investors will not touch Berry until it reduces leverage below 4x EBITDA. Perhaps Berry will work like Griffin in that once they reduce leverage below 4x and starts to show 4-6 quarters of 2% organic growth, the shares may move “violently” to the upside."

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Last December, we published an article telling that Berry Global Group, Inc. (NYSE: BERY) was in 43 hedge fund portfolios. Its all time high statistics is 53. BERY delivered a 29.32% return in the past 12 months.

Our calculations show that Berry Global Group, Inc. (NYSE: BERY) does not belong in our list of the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.