Good Things Come In Small Packages? RPC Group Trading Guide

RPC Group plc is a company that designs and produces packaging. Based in the United Kingdom, it has worldwide operations (at present, it is based in 11 countries globally), and as of 2013 is one of Europe’s top suppliers of FMCG packaging. A conglomeration of five packaging companies founded in 1991, RPC Group became London Stock Exchange-listed two years later, where it now occupies the FTSE 250 Index.

Many investors are looking for shares that allow them to tap into the lucrative buzz that attends famed consumer brands. Others are interested in investing in businesses that are constantly innovating, and pushing boundaries in the field of tech and design. Interestingly, RPC Group arguably fulfils both objectives – although it’s likely that the average person on the street has never heard their name previously, despite the fact they’ve almost certainly held packaging produced by RPC Group at least once in their lives.

Despite its lack of widespread recognition, there are many things that could make RPC Group shares attractive to investors. For one, RPC Group maintains lucrative contracts with some of the largest and most widely renowned consumer brands in the world, and has done for many years as a trusted provider – Nivea and Heinz are just two examples, among a veritable cornucopia of food, beverage and health companies. These relationships hold the company in good stead for the year ahead and provide the company with an ongoing portfolio of high profile work with which to secure new business.

For two, RPC Group constantly innovates. The company’s steady flow of new creations may not have the world-changing, revolutionary potential of 3D printing or new transportation devices – and it will likely never send RPC Group’s share price shooting into the stratosphere. However, these frequent updates and amendments to designs and processes are very effective at keeping the company relevant, lowering production costs, and maintaining market share. RPC Group is arguably a highly resilient company as a result, although investors may have their own assessment criteria and standards.

For three, RPC Group has a significant international imprint – an imprint which is ever-growing. Since 2010, the company has slowly and organically increased its direct exposure to key emerging markets in Asia and Latin America, where new packaging material and solutions are constantly sought, and consumer goods of both national and international manufacturers are taking off in popularity. Again, if this strategy is maintained, the company is well-positioned to grow in years to come.

Investors should always bear in mind that no share is a guaranteed must-buy, however, and there are certain aspects of packaging industry shares that may put the short-term minded investor off. For instance, producing packaging is expensive, and sales come in bursts, meaning dividends and capital growth can vary wildly throughout a year. Furthermore, prices rarely move significantly one way or the other. RPC Group shares must be held in the long-term for rewards to be unlocked.

Spread betting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.

Email Subs

Adsense

Syed Written by: