Pact Group Holdings Ltd (ASX:PGH)

Pact’s core business is manufacturing Australian plastic packaging. Management has a focus on improving efficiency to (1) reduce duplication and excess capacity, and (2) introduce technology aimed at longer-term cost savings. To stimulate organic growth Pact is focusing on acquisitions as its key driver. Asia’s higher growth markets will be the focus as they are expected to grow at twice the rate of the Australian market. Key drivers in the Asian market are; relatively higher GDP growth and a growing middle class. Acquisitions will boost long term revenue for Pact. Estimates suggest they could add sales growth of between 5% and 9% per annum. Pact trades on a P/E of 15.8x FY15, 9.0x EV/EBITDA and 12.9x EBIT all of which are at significant discounts to its global packaging peers. This combined with a dividend yield of 4.2% shows strong value in our opinion. See attachment for more detail or sign up for our monthly newsletter here: (VIEW LINK)