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WestRock Completed Acquisition of Cenveo Packaging

Gabriel Kane

Yesterday’s Consumer Pops and Drops: THS, WRK, FCAU, BC, HSY

(Continued from Prior Part)

WestRock price movement

WestRock (WRK) has a market cap of $9.3 billion. It fell by 1.1% to close at $36.05 per share on January 20, 2016. The price movements on weekly, monthly, and year-to-date (or YTD) bases are -6.0%, -19.7%, and -21.0%, respectively.

Technically, WestRock stock has broken the support and is trading below all moving day averages. Currently, it’s trading 15.7% below its 20-day moving average, 22.5% below its 50-day moving average, and 33.0% below its 200-day moving average.

The iShares Global Timber & Forestry ETF (WOOD) invests 3.1% of its holdings in WestRock. The ETF tracks the 25 largest publicly listed companies that own or manage forests and timberlands. The YTD price movement of WOOD is -13.5% as of January 19, 2016.

Competitors of WestRock (WRK) and their market caps are as follows:

  • International Paper (IP) – $14.6 billion
  • Packaging Corporation of America (PKG) – $5.5 billion
  • Graphic Packaging Holding (GPK) – $3.9 billion

WestRock’s acquisition of Cenveo

WestRock has completed the acquisition of Cenveo Packaging, a division of Cenveo Inc. It has acquired seven facilities in North America, including MiraFoil, cold foil, and low migration ink systems.

This acquisition will help generate synergies and accretive immediately to WestRock’s earnings.

WestRock’s performance in fiscal 4Q15

WestRock (WRK) reported fiscal 4Q15 net sales of $3,872.6 million, a rise of 48.5% when compared to net sales of $2,608.0 million in fiscal 4Q14. Its net income and EPS (earnings per share) fell to $115.8 million and $0.44, respectively, in fiscal 4Q15 compared to $153.9 million and $1.06, respectively, in fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, WestRock reported net sales of $11,381.3 million, a rise of 15.0% year-over-year. Its net income and EPS rose to $507.1 million and $2.93, respectively, in fiscal 2015, compared to $479.7 million and $3.29, respectively, in fiscal 2014.

WestRock’s inventories rose 90.8% in fiscal 2015. It reported cash and cash equivalents of $228.3 million in fiscal 2015, compared to $32.6 million in fiscal 2014. Its debt-to-equity ratio fell to 1.2 in fiscal 2015 compared to 1.6 in fiscal 2014.

WestRock’s PE (price-to-earnings) and PBV (price-to-book value) ratios are 11.3x and 0.81x, respectively, as of January 20, 2016.

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