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SeekingAlpha  Jul 22  Comment 
Market Intelligence Center  May 5  Comment 
MarketIntelligenceCenter.com's option-trade picking algorithms have identified an attractive covered-call trade on Silgan Holdings Inc (SLGN). Look at the Aug. '15 $55.00 covered call for a net debit in the $53.44 area. This trade has a duration...
Market Intelligence Center  Apr 20  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with Silgan Holdings Inc (SLGN) that should provide a 3.33% return in just 123 days. Sell one Aug. '15 call at the $55.00 level for each 100...
Market Intelligence Center  Mar 24  Comment 
After closing Monday at $58.46, Silgan Holdings Inc (SLGN) presents an attractive opportunity to get a 2.12% return in just 150 days, which is an annualized return of 5.15% (for comparison purposes only). To enter this trade, sell one Aug. '15...
Market Intelligence Center  Mar 2  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with Silgan Holdings Inc (SLGN) that should provide a 2.40% return in just 172 days. Sell one Aug. '15 call at the $55.00 level for each 100...




 
TOP CONTRIBUTORS

Silgan Holdings, Inc. (NYSE:SLGN) is the largest manufacturer of metal food containers in North America, in terms of volume.[1] Although most of its operations are in the US, Silgan runs major plastic container operations in Canada and Europe that make up almost 19% of its consolidated net sales.

Silgan manufactures most of its products in the United States and Europe. As competition from foreign-based companies that use cheaper, outsourced labor from emerging markets grows, the company will face mounting pricing pressures. In response to these pressures, Silgan has begun acquiring smaller competitors to expand its market share, investing in new technologies to increase manufacturing and production efficiency and perhaps most importantly, better controlling its raw materials costs through future contracts.

Business Overview

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Silgan Holdings, Inc. operates in four main market segments: metal food containers, plastic containers, and vacuum closures.

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Key Trends and Forces

Aluminum, steel critical factors in determining profitability

Aluminum and Steel were responsible for 29% and 31% of the company's direct production costs in 2006. These materials are purchased in highly competitive, price-sensitive markets which are often unpredictable. In 2006, the average market price for steel used in packaging increased approximately 6% and the average price of aluminum ingot on the London Metal Exchange increased approximately 35% during 2006[7].

Weather affects amount of food to be packaged

The food packaging business is seasonal with the first quarter as the slowest period since the autumn packing period in the Northern Hemisphere ends and new crops are not yet planted. The food packaging industry enters its busiest period in the third quarter when the majority of fruits and vegetables are harvested. Weather represents a substantial uncertainty in the yield of food products and is a major factor in determining the demand for food cans in any given year. A fierce winter storm in Brazil in 2003 led to heavy damage to coffee trees and the coffee bean production. This subsequently led to a drop in SLGN's sales of specialty containers to South America that year.

This weolbg is wonderful. There is often all the ideal information and facts at the tips of my fingers. Thanks and keep up the good work!

Competition

Silgan competes with other packaging manufacturers as well as with food processors and packers who manufacture containers for their own use. Silgan's biggest competitors include Amcor (AMCR), Ball (BLL), Rexam (REXMY), and Crown Cork & Seal Company (CCK).

  • Amcor (AMCR)-an Australian based packaging company that specializes in Polyethylene Terephthalate, plastic film, metals, and paper products packaging manufacture and sales. [8]
  • Ball (BLL)-an American manufacturer of metal and plastic packaging, primarily for beverages, foods and household products, and a supplier of aerospace and other technologies and services to government and commercial customers.[9]
  • Rexam (REXMY)-a British packaging company who specializes in metal, glass and plastic beverage packaging as well as plastic packaging solutions for beauty, pharmaceutical and food industries.[10]
  • Crown Cork & Seal Company (CCK) - an American manufacturer of steel and aluminum food and beverage containers containers, custom designed plastic containers, aerosol cans, and tubes and closures for a variety of consumer uses.[11]
Crown and Major Competitors (2006)[12]
Company Total Sales ($ mm) Net Income($ mm) Cost of Goods ($ mm) Gross Margin
Silgan Holdings (SLGN) $2,835 $104.2 $2,305 3.68%
Amcor (AMCR) $8,240 $379.2 $6,870 4.60%
Ball (BLL) $7,141 $329.6 $5,540 4.61%
Rexam (REXMY) $7,476 $223.0 $5,854 2.98%
Crown Cork & Seal Company (CCK) $6,982 $205.0 $5,863 2.94%



References

  1. SLGN 2007 10k, Pg 1
  2. SLGN 2006 10k, Pg 6-7
  3. SLGN 2006 10k, Pg 6
  4. SLGN 2006 10k, Pg 7
  5. SLGN 2006 10k, Pg 7
  6. , SLGN 2006 10k p 27
  7. SLGN 2006 10k p 14
  8. AMCRY 2006 20f
  9. BLL 2006 10k
  10. REX 2006 20f
  11. CCK 2006 10k
  12. [All Data from respective annual reports (10k, 20f, or 40f) filed with the SEC]
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