Silgan – beware of its growth

NYSE Silgan is a leading manufacturer of sustainable rigid packaging solutions for the world. growth over the past 13 years was driven more by acquisitions than organic growth. It was also due more to price growth rather than volume growth.

Acquisitions were carried out at an unsustainable Reinvestment rate. There were also no uptrends in the ROE and operating parameters. All these do not point to strong fundamentals.

There is only some margin of safety if you believe that the current high product selling prices will persist. With an unsustainable Reinvestment rate, it is not an investment opportunity

For details refer to page 33 of INVEST