Is it a Wise Choice to Invest in Berry Global (BERY)?

Rhizome Partners, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. For the second quarter of 2022, Rhizome Partners generated a net loss of 9.1% versus a 16.1% loss for the Standard & Poor’s 500 Index and a 14.7% loss for the National Association of Real Estate Investment Trusts (NAREIT) Index. During the quarter, the fund’s hedging efforts generated about 5.5% of gains. The hedging gains were the primary contributor to Rhizome’s outperformance in the S&P 500 and the NAREIT.  Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Rhizome Partners mentioned Berry Global Group, Inc. (NYSE:BERY) and explained its insights for the company. Founded in 1967, Berry Global Group, Inc. (NYSE:BERY) is an Evansville, Indiana-based manufacturer and marketer of plastic packaging products with a $6.9 billion market capitalization. Berry Global Group, Inc. (NYSE:BERY) delivered a -25.21% return since the beginning of the year, while its 12-month returns are down by -18.92%. The stock closed at $55.18 per share on August 30, 2022.

Here is what Rhizome Partners has to say about Berry Global Group, Inc. (NYSE:BERY) in its Q2 2022 investor letter:

Berry Global sold off during the quarter and now trades at 7 times P/FCF, or a 14% free cash flow yield. Unlike previous years, when Berry was focused on deleveraging the balance sheet, Berry can now direct 30-50% of its free cash flow into share buybacks. We believe Berry can buy back 4-7% of the shares outstanding each year at the current share price while also paying down 0.2-0.3 times EBITDA of the debt per year. This is a good setup for future stock returns.

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Our calculations show that Berry Global Group, Inc. (NYSE:BERY) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Berry Global Group, Inc. (NYSE:BERY) was in 37 hedge fund portfolios at the end of the second quarter of 2022, compared to 42 funds in the previous quarter. Berry Corporation (NASDAQ:BRY) delivered a -4.70% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.

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