Bemis Company, Inc. (BMS) Buy or Sell Stock Guide

Last updated: Sep 23, '17

The analysis below may be helpful to you if you have any of the following questions about BMS stock:

  • Is BMS a buy or a sell?
  • Should I sell or hold BMS stock today?
  • Is BMS a good buy / a good investment?
  • What are BMS analyst opinions, recommendations, ratings?

Here are BMS stock buy reasons/signals:

1. Bemis has the pricing power to pass increasing input costs on to the majority of its customers, thereby allowing it to maintain its flexible packaging margins.

2. Bemis' economies of scale and scope, paired with its high-value packaging and materials expertise, create barriers to entry for competitors.

3. The sale of the noncore label business allows management to better focus on its moatworthy flexible packaging operations.

4. BMS profitability is improving. The YoY profit margin change was 0.02pp.

5. BMS forward dividend yield is 2.56%, higher than the industry (1.02%) and sector (1.37%) forward dividend yields.

Here are BMS stock sell reasons/signals:

1. Bemis has significant exposure to Brazil, where economic growth has been slower than expected. Regional food inflation has hurt consumer demand for higher-margin packaged goods, where Bemis has the widest advantage over competitors.

2. Rising food prices that aren't fully offset by consumer wage growth will lead to lower volume and negatively affect Bemis' margins.

3. The new CEO will be under pressure to make aggressive moves following years of slow growth and restructuring. This could lead to empire building.

4. BMS quarterly revenue growth was -0.90%, lower than the industry and sector average revenue growth (4.26% and 4.27%, respectively).

5. BMS PEG ratio (P/E adjusted for growth) is 3.21, and it’s high compared to its industry peers’ PEG ratios.

6. BMS average analyst price target ($46.07) is below its current price ($47.35).

7. BMS short interest (days to cover the shorts) ratio is 3.93. The stock garners more short interest than the average industry, sector or S&P 500 stock.

What are your thoughts on BMS?

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