The following are the top rated Basic Materials stocks according to Validea's Patient Investor model based on the published strategy of Warren Buffett. This strategy seeks out firms with long-term, predictable profitability and low debt that trade at reasonable valuations.
SHERWIN-WILLIAMS CO (SHW) is a large-cap growth stock in the Chemical Manufacturing industry. The rating according to our strategy based on Warren Buffett is 82% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: The Sherwin-Williams Company is engaged in the development, manufacture, distribution and sale of paint, coatings and related products. The Company's Americas Group segment sells a range of architectural paints, coatings and related products through dealers, home centers, distributors, hardware stores and other retailers throughout Latin America. The Consumer Brands Group segment supplies a portfolio of branded and private-label architectural paint, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks and adhesives to retailers and distributors throughout North America, as well as in China and Europe. The Performance Coatings Group segment develops and sells industrial coatings for wood finishing and general industrial (metal and plastic) applications, automotive refinish, protective and marine coatings, coil coatings, packaging coatings, and performance-based resins and colorants.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
| EARNINGS PREDICTABILITY: | PASS |
| DEBT SERVICE: | PASS |
| RETURN ON EQUITY: | PASS |
| RETURN ON TOTAL CAPITAL: | FAIL |
| FREE CASH FLOW: | PASS |
| USE OF RETAINED EARNINGS: | PASS |
| SHARE REPURCHASE: | PASS |
| INITIAL RATE OF RETURN: | PASS |
| EXPECTED RETURN: | PASS |
Detailed Analysis of SHERWIN-WILLIAMS CO
SILGAN HOLDINGS INC. (SLGN) is a mid-cap value stock in the Containers & Packaging industry. The rating according to our strategy based on Warren Buffett is 72% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Silgan Holdings Inc. is a manufacturer of rigid packaging solutions for consumer goods products. The Company operates through three segments: dispensing and specialty closures, metal containers and custom containers. Its dispensing and specialty closures segment manufactures and sells dispensing systems and specialty closures for food, beverage, health care, garden, home, personal care, fragrance and beauty products. Its metal containers segment is engaged in the manufacture and sale of steel and aluminum containers for human and pet food and general line products. Its custom containers segment manufactures and sells custom-designed plastic containers for personal care, food, health care, pharmaceutical, household and industrial chemical, pet food and care, agricultural, automotive and marine chemical products. Its dispensing and specialty closures segment operates in North and South America, Europe and Asia. Its metal containers segment operates primarily in North America and Europe.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
| EARNINGS PREDICTABILITY: | PASS |
| DEBT SERVICE: | FAIL |
| RETURN ON EQUITY: | PASS |
| RETURN ON TOTAL CAPITAL: | FAIL |
| FREE CASH FLOW: | PASS |
| USE OF RETAINED EARNINGS: | PASS |
| SHARE REPURCHASE: | PASS |
| INITIAL RATE OF RETURN: | PASS |
| EXPECTED RETURN: | PASS |
Detailed Analysis of SILGAN HOLDINGS INC.
TREX COMPANY INC (TREX) is a mid-cap growth stock in the Forestry & Wood Products industry. The rating according to our strategy based on Warren Buffett is 72% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Trex Company, Inc. is a manufacturer of wood-alternative decking and residential railing and outdoor living products and accessories, marketed under the brand name Trex. The Company is also a provider of custom-engineered commercial railing and staging systems for the commercial and multi-family market, including sports stadiums and performing arts venues. The Company operates in two reportable segments: Trex Residential Products (Trex Residential), and Trex Commercial Products (Trex Commercial). Trex Residential manufactures outdoor living products, consisting of composite decking and railing products, hidden fasteners, and outdoor living accessories. Trex Commercial manufactures and sells its custom, modular and architectural railing and staging systems. The Company offers a range of products, such as Trex Outdoor Furniture, Trex RainEscape, Trex Pergola, Trex Latticeworks, Trex Cornhole Boards, Diablo Trex Blade, Trex SpiralStairs and Structural Steel Posts, and others.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
| EARNINGS PREDICTABILITY: | PASS |
| DEBT SERVICE: | PASS |
| RETURN ON EQUITY: | FAIL |
| RETURN ON TOTAL CAPITAL: | FAIL |
| FREE CASH FLOW: | PASS |
| USE OF RETAINED EARNINGS: | PASS |
| SHARE REPURCHASE: | PASS |
| INITIAL RATE OF RETURN: | PASS |
| EXPECTED RETURN: | PASS |
Detailed Analysis of TREX COMPANY INC
UFP INDUSTRIES INC (UFPI) is a mid-cap value stock in the Forestry & Wood Products industry. The rating according to our strategy based on Warren Buffett is 70% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: UFP Industries, Inc. is a holding company with subsidiaries throughout North America, Europe, Asia, and Australia, which supply products primarily manufactured from wood, wood and non-wood composites, and other materials. The Company has three segments: Retail, Industrial and Construction. Retail segment offers a portfolio of outdoor living products, including wood and wood composite decking and related accessories, decorative lawn and garden products, and craft and hobby products. Industrial segment manufacturers and agricultural customers who use pallets, specialty crates, wooden boxes and other containers used for packaging, shipping and material handling purposes, as well as various other products, including protective packaging, used in a variety of different applications. Construction segment is made up of customers in four primary markets, factory-built housing, site-built residential construction, commercial construction and concrete forming.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
| EARNINGS PREDICTABILITY: | PASS |
| DEBT SERVICE: | PASS |
| RETURN ON EQUITY: | FAIL |
| RETURN ON TOTAL CAPITAL: | FAIL |
| FREE CASH FLOW: | PASS |
| USE OF RETAINED EARNINGS: | PASS |
| SHARE REPURCHASE: | NEUTRAL |
| INITIAL RATE OF RETURN: | PASS |
| EXPECTED RETURN: | PASS |
Detailed Analysis of UFP INDUSTRIES INC
BERRY GLOBAL GROUP INC (BERY) is a mid-cap value stock in the Containers & Packaging industry. The rating according to our strategy based on Warren Buffett is 65% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Berry Global Group, Inc. is engaged in providing packed and engineered products. The Company's segments include Consumer Packaging International, Consumer Packaging North America, Health, Hygiene & Specialties, and Engineered Materials. The Consumer Packaging International segment consists of containers, closures and dispensing systems, pharmaceutical devices and packaging, bottles and canisters, and technical components. The Consumer Packaging North America segment consists of containers and pails, foodservice, closures, bottles, prescription vials, and tubes. The Health, Hygiene & Specialties segment consists of nonwoven specialty materials, tapes and adhesives, and films used in hygiene, infection prevention, personal care, industrial, and construction. The Engineered Materials segment consists of stretch and shrink films, converter films, institutional can liners, food and consumer films, retail bags, and agriculture films. It serves markets, such as beverage, food, and beverage.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
| EARNINGS PREDICTABILITY: | PASS |
| DEBT SERVICE: | FAIL |
| RETURN ON EQUITY: | FAIL |
| RETURN ON TOTAL CAPITAL: | FAIL |
| FREE CASH FLOW: | PASS |
| USE OF RETAINED EARNINGS: | PASS |
| SHARE REPURCHASE: | PASS |
| INITIAL RATE OF RETURN: | PASS |
| EXPECTED RETURN: | PASS |
Detailed Analysis of BERRY GLOBAL GROUP INC
More details on Validea's Warren Buffett strategy
About Warren Buffett: Warren Buffett is considered by many to be the greatest investor of all time. As the chairman of Berkshire Hathaway, Buffett has consistently outperformed the S&P 500 for decades, and in the process has become one of the world's richest men. (Forbes puts his net worth at $37 billion.) Despite his fortune, Buffett is known for living a modest lifestyle, by billionaire standards. His primary residence remains the gray stucco Nebraska home he purchased for $31,500 nearly 50 years ago, according to Forbes, and his folksy Midwestern manner and penchant for simple pleasures -- a cherry Coke, a good burger, and a good book are all near the top of the list -- have been well-documented.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
