Issue 42 – CCL Industries: A Value Stock?


Issue 42 – CCL Industries: A Value Stock?

CCL Industries Inc (TSX: CCL.B) supplies manufacturing services and specialty packaging products like labels, tubes for pharmaceutical and cosmetic products, and containers. The company has a very impressive history of making accretive acquisitions. Since its last acquisition, CCL.B has brought down its net debt to $1,755, bringing its net debt/EBITDA multiple down to 1.6x. With a balance sheet under 2x, it is probably fair to say that CCL.B is on the hunt for its next acquisition. It’s important to note that the company never issues stock from treasury; acquisitions are usually financed by its balance sheet. This means that the deals CCL does are often accretive for shareholders from day one.

Disclaimer: Palos Funds are shareholders of CCL.B.

 

By Charles Marleau, CIM & Joany Pagé, CFA

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