$Berry Global Group (BERY.US)$It is made of plastic packagin...
$Berry Global Group(BERY.US$It is made of plastic packaging. Revenue has continued to grow over the past 5 years, with an average growth rate of 15.4%. Operating profit increased in the first 4 years. In 2022, due to falling gross margin, it shrank by 5.8%, and the 5-year average growth rate was 10.8%. Net profit increased by 4.5% due to falling interest expenses and other cost reductions. Interest expenses accounted for 22.6% of operating profit in 2022, and the burden is still not light.
Revenue for the first two quarters of 2023 fell 13.6%, operating profit fell by only 5.7%, and net profit fell 14.1% due to the increase in gross margin.
The balance ratio continued to decline after rising to a high of 90.2% in 2019, fell to 81.2% in 2022, and fell further to 80.2% in 2023Q2.
The ratio of receivables to inventory is not high. Goodwill and other intangible assets reached 6.866 billion, more than 2 times the net assets of 3,295 billion dollars, and the asset content is very low. The long-term loan is 9.295 billion, and the leverage ratio is very high.
Due to large acquisitions carried out in 2019, the net operating amount over the past five years has been less than the net investment amount, and no shareholder surplus has been generated. However, in the past 3 years, the net operating amount has greatly exceeded the net investment amount. Shareholder surpluses have accumulated rapidly, and shareholder surpluses in the first two quarters of 2023 have become negative again.
Currently, the price-earnings ratio is 11.6, and the price-earnings ratio TTM has increased slightly to 11.7. If you calculate the 5-year average net profit of 5.9, the price-earnings ratio is 13.5. The current valuation is quite reasonable, so there is no need to increase or reduce positions for the time being.
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