Stock (Symbol) |
Ball (BLL) |
Stock Price |
$72 |
Sector |
| Food & Necessities |
Data is as of |
| April 20, 2017 |
Expected to Report |
| May 4 |
Company Description |
 Ball Corporation is a supplier of metal packaging to the beverage, food, personal care and household products industries. It produces steel food, aerosol and extruded aluminum aerosol containers and aluminum slugs. Its aerospace business designs, develops and manufactures aerospace systems for civil, commercial and national cyber security aerospace markets. Source: Thomson Financial |
Sharek’s Take |
 Founded in 1880, Ball Corporation (BLL) is the largest manufacturer of beverage cans in the world, with 27 can sizes in North America and 75 beverage plants worldwide. Over the years (2007-2014) BLL has proven to be a steady grower, but that hasn’t been the case recently. BLL had record profits of $3.88 in 2014 then profits dipped to $3.48 in 2015 and $3.49 in 2016. Last year the Colorado based Ball acquired Rexam, which was based in the UK and now the company is cutting costs such as closing Rexam’s headquarters. Management has a long-standing financial strategy of 10% to 15% profit growth over time, and expects 20% profit growth this year. Analysts expect 21% profit growth this year then 19% in 2018 and with a P/E of around 17 this stock could go appreciably higher in the coming years. My 2018 Fair Value is 19x earnings, which equates to $95 a share. I will purchase Ball for the Conservative Portfolio today. |
One Year Chart |
 Ball’s qtrly profit growth is expected to be 22%, 8%, 32% and 25% in the coming qtrs. The company has beaten the street the last 3 qtrs, but just lowered 2017 profit estimates the last time it reported. Last qtr Ball delivered 9% profit growth on 39% sales growth, which was helped by the merger. The negative on this chart is the Est. LTG of just 9% per year. When you add in the 1% yield you get an estimated total annual return of 10% per year, which means this stock isn’t a good pick for growth investors. |
Fair Value |
 Ball has a solid history of profit growth, if you look beyond the past two years. Now with profits expected to hit record highs again my Fair Value is 19x earnings, or $80 this year and $95 next year. |
Bottom Line |
 Ball Corp is a good stock for conservative investors, and with profits expected to grow 20% the next two years BLL could be due for a run higher. Twenty percent profit growth with a P/E of around 17 is a good value! Plus, when companies make acquisitions the synergy savings are often more than management’s (public) expectations so profits could come in better than expected. I will add BLL to the Conservative Portfolio today, where it will rank 10th in the portfolio’s Power Rankings. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
