Quality-wise, I struggle to classify this company.
Sometimes I think it is a good, defensive business, which is deserving of premium-to-market valuation multiples; but at other times I see at as being a bit of a mediocre and cyclical business which struggles to grow organically.
It is no CSL (at the pristine end of the quality spectrum), but then again, it is not as bad a business as Telstra, either (Telstra being at the inferior end of the quality scale).
If CSL is a 10 out of 10 company, and Telstra a 2 out of 10, what quality score would Amcor be ascribed?
Surely not a high as 8 out of 10? Nor as low 4 out of 10, on the other hand.
So, does that mean it is a 6 out of 10?
In which case, an EV/EBITDA multiple of 10.5x - which is where the stock is trading on a 12-month prospective basis - appears to me to be a reasonably attractive valuation.
Not ridiculously cheap, but cheap enough for there to be reasonable downside protection to one's capital.
Because, if the stock was to continue de-rating, then I think it is unlikely to spend much time trading at a single-digit EV/EBITDA multiple.
AMC Price at posting:
$13.85 Sentiment: None Disclosure: Not Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)