Overlay 2 Packaging Co's in Diff Industries
One of these stocks makes plastic, rubber and glass containers for packaging highly sensitive drugs and pharmaceuticals and the other makes cardboard and paper containers and packaging. Impressive gains in the market valuation of both companies over the past 14 years. Both companies seem to have achieved similar results in shareholder return by appealing to the same investor base who like to own the companies that make the essential "vessels" that our goods are packaged in.
But these companies are hardly similar and yet their stock prices move as if they are extremely similar. Waves and waves seem to be in synch with each other.
Is one a leading indicator for the other? Is the drop in PKG indicating a future drop in WST? Or do you buy PKG because it is lagging? I'm not offering a simple trade here, only the observation that two very different companies can have very similar returns.
Conclusion: Make sure you know what you own.
Tim
One of these stocks makes plastic, rubber and glass containers for packaging highly sensitive drugs and pharmaceuticals and the other makes cardboard and paper containers and packaging. Impressive gains in the market valuation of both companies over the past 14 years. Both companies seem to have achieved similar results in shareholder return by appealing to the same investor base who like to own the companies that make the essential "vessels" that our goods are packaged in.
But these companies are hardly similar and yet their stock prices move as if they are extremely similar. Waves and waves seem to be in synch with each other.
Is one a leading indicator for the other? Is the drop in PKG indicating a future drop in WST? Or do you buy PKG because it is lagging? I'm not offering a simple trade here, only the observation that two very different companies can have very similar returns.
Conclusion: Make sure you know what you own.
Tim
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