Paul Kasian is head of asset management at Equity Trustees.
How long have you held the stock?
We have held an overweight position for a number of years.
What do you like about it?
Amcor Limited (AMC) is a global packaging company with operations across Australasia, North America, Latin America, Europe and Asia. Based in Melbourne, it is the twentieth largest company on the ASX with a market capitalization of $15.574 billion.
Amcor holds the number one or two position in each of the markets it participates in, with the majority of its earning coming from very defensive industries such as food and beverage, and healthcare. It has achieved a nice balance between dividend growth and earnings growth. It continues to successfully deploy capital from low growth geographies into higher growth emerging markets, thus increasing returns.
How is it better than its competitors?
Amcor’s scale advantage provides a competitive advantage in wining and maintaining its customers. It has a focused portfolio of businesses, and has developed a unique and differentiated set of capabilities in managing the business.
What do you like about its management?
Amcor has developed a track record of disciplined cash and capital deployment, and adheres to a very resilient shareholder value creation model. Management is realistic about where the business and the external environment now sit, and are adapting to thrive in a lower growth environment.
How do you think Amcor will perform in the year ahead?
We think Amcor will outperform in a more challenging environment. Ongoing A$ weakness is likely to continue to generate outperformance versus the rest of the market.
At what point would you sell it?
We regard it as a core holding in our portfolios, and would probably only sell it if the investment proposition was to alter radically, or if it became excessively expensive versus other opportunities, which it is not at the moment.
How much has it added to your overall portfolio over the last 12 months?
Amcor is up 17.25% in the last year, well outperforming the overall market.
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