What Makes Sonoco Products (SON) an Attractive Stock?

Soumya Eswaran

Wed, Apr 16, 2025, 7:30 AM 3 min read

Middle Coast Investing, an investment advisor firm, released its first-quarter investor letter. A copy of the letter can be downloaded here. Middle Coast Investing had a difficult but manageable first quarter, but everyone has suffered since the Liberation Day crash at the beginning of the second quarter. To manage the volatility, the firm decided to increase cash goal levels by roughly 5% for each portfolio. In the quarter, the firm sold 3% more than it bought. In Q1 2025, the US Portfolios returned -3.7% compared to -4.6% for the S&P 500. It’s Core U.S. portfolios returned -0.7% while Russell 2000 returned -9.8%, S&P 600 returned -9.3% and Nasdaq generated -10.4% for the same period. However, its European Portfolios appreciated by 9.2%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first quarter 2025 investor letter, Middle Coast Investing emphasized stocks such as Sonoco Products Company (NYSE:SON). Sonoco Products Company (NYSE:SON) engages in the manufacturing of engineered and sustainable packaging products. The one-month return of Sonoco Products Company (NYSE:SON) was -9.01%, and its shares lost 21.08% of their value over the last 52 weeks. On April 15, 2025, Sonoco Products Company (NYSE:SON) stock closed at $44.03 per share with a market capitalization of $4.342 billion.

Middle Coast Investing stated the following regarding Sonoco Products Company (NYSE:SON) in its Q1 2025 investor letter:

Sonoco Products Company (NYSE:SON) – This is not the oil and gas company (that’s Sunoco). Sonoco produces consumer packaging for food and staples products, in both metal and paper, and industrial paper packaging. It is shuffling its business portfolio, acquiring Eviosys in Europe and selling its heat-safe packaging businesses. It is attractive because it should be able to pay off debt, leading to more value for the equity, and because the equity is cheap compared to earnings. This is – or should be – a boring business, levered to the sorts of things we buy in any environment. In that way it’s similar to Crown Holdings(CCK), which we also added to this quarter after it had a good report. Crown Holdings is focused on beverages, but similar idea.

Aerial view of a factory producing consumer packaging and fiber-based protective packaging.

Sonoco Products Company (NYSE:SON) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Sonoco Products Company (NYSE:SON) at the end of the fourth quarter which was 29 in the previous quarter. While we acknowledge the potential of Sonoco Products Company (NYSE:SON) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.