The traders should not forget to slow of the packaging of the stocks. Like an increasing number of coronavirus infections in many parts of the country, threatening to derail the economic recovery, the packing group may see renewed interest from buyers, investors turn to recession-proof names that we can climb more than expected from the recession.
Consistent with the pandemic is essential in the markets in the food, beverage, health care, and to ensure the stability of the demand for packaging manufacturers in the second half of the year. In addition, consumers are likely to continue to buy the products online, because they spend more time at home, which increases the need for cardboard packaging used to secure the transport. In fact, the market research portal Statista expects U.S. retail e-commerce sales to reach $475 billion in 2021, from $365.2 billion in 2019.
Below, we review three of the largest sides of the packaging of the stocks before turning to the maps to identify potential trend trading opportunities.
Packaging Corporation of America (PKG)
Packaging Corporation of America (PKG) manufactures and sells containerboard and corrugated packaging products used to protect the goods during transport. It also provides packaging solutions for the meat, fruit and vegetables, processed foods and beverages. The $ 9.3 billion packaging giant delivered the first quarter, an earnings surprise of 25% on the back of higher volumes and lower operating costs. Packaging Corporation shares an attractive 3.3% dividend yield and is trading at nearly 15% over the last three months to June 30, 2020. Year to date, shares have slipped 11.06%.
Since dipping into the low $70’s at the height of the pandemic sales, the share price has an upward trend in choppy trade. A recent dip of the dotted blue trendline and 50-day simple moving average (SMA) provides a high probability entry point for swing traders to join the upward trend. Those who buy at these levels should consider placing a stop-loss order below the $93.38 low and book profits on a recovery of the major horizontal resistance line around $111.50.
Graphic Packaging Holding Company (GPK)
Graphic Packaging Holding Company (GPK) provides paper-based packaging products to customers in the food, beverage, and consumer products industries. The Atlanta-based firm reported first-quarter adjusted earnings of 31 cents per share, easily topping analysts expectations of 25 cents per share. Despite the uncertainty of the operating environment, the management has reassured investors that the company is committed to returning capital through dividends and distributions. Wall Street analysts have a 12-month consensus price target on the security to $16.54, representing a 20% premium to Monday, $13.74 close. As at 30 June 2020, Graphic Packaging shares have a 2.26% dividend yield and have increased 16.88% since the end of March.
The buyers have defended the $13.50 area during the last sessions, where the price is a vital support from a trend line in up to the March 23 low. Before taking a long position, traders may decide to wait for the moving average convergence divergence (MACD) indicator to cross above its trigger line to confirm the improvement in sentiment. Those who come here should take profit of the order near key overhead resistance at $15.30 but in the end, if the stock reverses below this month’s low at $13.
Sealed Air Corporation (SEE)
Sealed Air Corporation (SEE) provides food safety and security, packaging solutions through two business segments: Food Care and Product Care. The manufacturer of Darfresh vacuum skin packaging and blink of an eye, shippers, saw its revenues increase by 24% in the first quarter, with higher volumes and favorable margins to contribute positively. From a point of view of the valuation, the $5.06 billion the company trades at about 12 times projected earnings, significantly below its five-year average multiple of 16.5 times. Sealed Air’s stock has gained 32% over the last three months, outperforming the packaging and containers industry average during the same period by nearly 7% at 30 June 2020.
The shares pared about half of their pandemic loss between mid-March and early April, but have been derived mainly from the side since. However, a break above two weeks of the consolidation period of the Monday of the session may tempt the buyers of the margin in the weeks to come. Those who trade in the stock should watch for a return to the $38 – an area on the map which is encountering resistance from 12 months horizontal trend line. Manage the risk by placing a stop under the 50-day SMA and the amendment of the ordinance for the threshold of profitability if the price closes above the from June to $36.15.