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Opinions James Telfser
Winpak Ltd.WPK.TOCOMMENTApr 11, 2016
James TelfserStock price when the opinion was issued
As of Jun 19, 2026. Market Open.
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Premium contentOur PAST TOP PICK with WPK has triggered its stop at $39. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 9%, when combined with the previous recommendations.
WPK is a bit of a 'sleeper'. It has $450M net cash, and is 53% owned by its parent. The stock is cheap. Looking at consensus estimates, EPS growth is really expected to slow down, and is essentially going to be flat next year. Expectations are for sales +5% and EPS to go from $2.33 to $2.34. Assuming nothing else happens, it looks like the 'ramp up' is likely over.
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Premium contentWe reiterate this manufacturer of food, beverage and healthcare product packaging as a TOP PICK. Recently reported EPS was up 16%, representing the highest Q1 earnings achievement in company history. It trades at 16x earnings and 1.7x book. We recommend maintaining the stop at $39, looking to achieve $53 -- upside potential over 21%. Yield 0.2%
(Analysts’ price target is $53.82)Premium contentAlso on April 25, this packaging company from Winnipeg reported a strong quarter. Q1 2023 EPS of $0.60 rose 16% from $0.52 a year earlier and marked the company's highest quarterly earnings in history, despite higher operating expenses shaved EPS by two pennies. Revenues of $304.5 million jumped 10.3% higher from a year ago, while volume grew by 8.7%. Note that Q1 2022 suffered from an aluminum foil shortage. Gross margins slightly shrunk to 28.8% compared to 29.5% a year ago.
Premium contentWe reiterate WPK, a North American producer of packaging materials based out of Winnipeg, as a TOP PICK. Recently reported earnings grew 24% on a 18% increase in revenues. It is presently trading at under 2x book value on 16x earnings. We like that cash reserves are growing while debt is being retired. We recommend trailing up the stop (from $35) to $39, looking to achieve $53 -- upside potential of 24%. Yield 0.2%
(Analysts’ price target is $53.19)Premium contentWPK is a North American producer of packaging materials based out of Winnipeg. It is presently trading at under 2x book value on 15x earnings. We like that cash reserves are growing while debt is being retired. Analysts expect a 24% increase in earnings this year. We recommend a stop-loss at $35, looking to achieve $55 -- upside potential of 30%. Yield 0.3%
(Analysts’ price target is $54.97)Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Large acquisitions expand addressable market. Controversies and approval weigh on stock. Remains a high growth company. Valuation attractive relative to peers. Unlock Premium - Try 5i Free
Rob McConnachie
(A Top Pick January 8/18 - Down 1%.) Part of the industrials that experienced massive multiple contraction. Earnings are growing. Lots of cash on the balance sheet. Still like it a lot.
James Telfser
This business makes small acquisitions that are incremental. They have high margins and high returns. They think very long term. He does not think it is properly appreciated.
Greg Dean
All kinds of packaging. A really well run company. Believes management has been doing an excellent job. The one thing they haven’t been doing is finding good acquisition targets. He is willing to jump on the valuation at these levels, because their cash position, the special dividends they give, and the optionality and catalyst that they potentially have going forward, could give you some nice expansion. No debt on the balance sheet. All the cash they generate is going to either go for a deal or paid out as a special dividend.