Are plastic bottle makers going to be under pressure?

Something like 16 countries have signed on to banning single use plastics (bottles, bags, etc) – many of whom have an implementation date in the next 1-2 years. Canada is one of them. Despite the fact that Canada is not a major contributor to the plastic waste crises – I think it’s a good thing for any country to take action in. Even our PM – who was on record as having some $300/month in bottled water sent to his current residence at the Rideau Cottage, has finally decided to join the movement. Apparently, he has changed his ways – as his recent eloquent statement implies “Uh, we, uh, we have recently switched to drinking, uh, water bottles out of, uh, water out of, uh, when we have water bottles, uh, out of plastic, uh, sorry, away from plastic towards, uh, paper, um, like drink box water bottles sort of things.”

Sorry to the PM’s fans – but I just could NOT let that one slide! Anyhow–on with the show…

plastic bottle market

So, with the great, and not so great, leaders across the world banning plastics – are plastic bottle makers going to take a hit? I wanted to look at the chart patterns of some of their stocks to see if I could detect the early stages of breakdown (aka “phase 3 tops” – see my book Sideways). Many of the plastic bottle and container makers are in China, and harder to track.  But we do have a couple of major plastic food container manufacturers here in North America. It’s not a big data sample to look at only two stocks – but it’s all I could find. Most NA plastic manufactures are more heavily invested in automotive parts and other products – less so in consumer orientated bottles and bags, etc. Whatever the case…This was an exercise in curiosity more than anything. Here’s my take on Berry Plastics Group and Sonoco Products.

 

Berry Plastics

BERY-US looks like many stocks on the S&P 500. After a rising stock trend during the past number of years, it, like the SPX itself, began to move sideways. Clearly the recent pullback came after an overbought momentum signal – as with the broader SPX. I suspect that this stock will follow the path of the broader markets. And that path is relatively sideways. The SPX has been trapped in a long consolidation period – and so has BERY. I’d view this a trader. As far as the impact of plastic container policies – the market doesn’t seem to be implying a greater risk discount to the market.

 

Sonoco Products

This is an uptrend if I ever saw one. In fact, it’s quite overbought – noted by the parabolic move on the stock, overbought momentum studies, and its distance above the 200 day SMA. Moneyflow is strong, and with a bit of a correction to rid the stock of its excess, I would suggest it would be a good stock to keep in mind as a potential buy. Nothing suggesting these guys – or their shareholders—are too concerned about the move away from plastic towards, uh, paper, um, like drink boxes.

8 Comments

  • I have been trying to get a copy of his speech?? could you give the hole mess he made or direct me to where to find thanks

    Reply
    • The entire speech will be available somewhere on the internet–I have linked the clip of that particular part to the blog–if you do a search you will find it eventually.

      Reply
  • Pretty obvious attempt to slag the PM while alluding to investment advice on plastic bottles.

    I honestly thought you were above such an approach….I guess I was sadly wrong.

    Reply
    • Its the price of admission to this blog and the free analysis. I don’t allow ads and annoying pop-ups nor do I endorse spying software to identify your url so it can follow your internet views and pop annoying adds in your face all the time for compensation from Google. Nope….I just beat on Trudeau once in a while. But honestly, some things just must be said, even at the risk of offending his remaining fans.

      Reply
      • Keith,

        If ok with you, as an exception, you can host a Trudeau Like-dislike topic. No bashing, just list what you like or dislike about Mr. Trudeau’s policy or actions ? Thanks

        Reply
        • James–its not really the purpose of the blog to drone on and on about why I don’t agree with current Federal Government policy or quality of their chosen leader. I interject bit and pieces here and there – usually when they are pertinent to a topic such as fiscal policy, debt, economic policy etc.
          I did a blog back in December (my “yearly off-topic rant”) that summarizes just a few of the talking points you might be interested in – but I don’t intend to turn this into a political blog. FYI here is the link:
          https://www.valuetrend.ca/keiths-yearly-rant-the-job-interview/

          This current blog was kind of a combination of a genuine look at whether some stocks may be affected by policy decision, and a poke at what appears to be a bit of BS’ing (cardboard drink boxes…um, ok..) — I did have a laugh at this recent stumbling (similar to when he choked answering to his Aga Khan ethics charge connection, and his speech on deficit vs. surplus bumbling–its downright comical to hear… even if you like the guy!) – it’s like when people Mock Trump for his very strange ways. Politicians are fair game – especially when they are prone to bouts of intense stupidity or foot in mouth syndrome – as Trudeau and Trump both are.

          Reply

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