There are few major Australian companies that have had their shares subjected to as many sell ratings over the years as Amcor (AMC). Over the last 2 or 3 years when the stock market was booming almost nobody rated AMC as a buy, and more often than not it was marked as a sell. (and seldom a hold) But there just might be some life left in the company yet.
Of course Amcor has had some nasty issues to deal with such as an ACCC investigation into price fixing, a strong Australian dollar,higher oil prices and some poorly performing business units. But under Ken MacKenzie the company has begun over the last couple of years to sort itself out, and slowly there are signs that “Way Forward” business improvement program launched in 2005 is starting to reap rewards.
In addition since the company earns most of it’s money offshore, earnings are getting a boost from the weaker Australian dollar and the fall in the oil price is also helping as well.
This year the Amcor share price has been knocked around like most other stocks but recently it has shown signs of recovery and if my eyes don’t deceive me, there is even signs that an upward trend is emerging as we can see on the chart below.
Amcor Limited (AMC) vs All Ordinaries Chart
Amcor is also one of those ASX listed stocks that can help to diversify a shares portfolio because of the company’s exposure to Asia, Europe and the U.S. (as opposed to having a portfolio full of Australian focused companies such as Woolworths)
If you believe that the global economy will recover over the next few years, then a global packaging giant like Amcor might be a good stock to look at while the markets are down. (see Why the global economy will recover) As always please do plenty of your own research and seek professional advice as required.
(Please read our blog disclaimer and note that the author of this blog has an indirect interest in AMC shares)