Reynolds Consumer Products (REYN) came on the market via an IPO (initial public offering) in the beginning of 2020. The company was a part of Alcoa (AA) for quite a few years and then was acquired by a private equity company controlled by one of New Zealand’s richest men. It has now finally found its way back to the public market as a standalone entity. The company has many products that are considered staples of the household and is most notably known for its aluminum foil wrap.
The company stated it had a 64% share of the market for foil wrap which is quite impressive for any company to have that kind of market share. I believe as a standalone consumer products company, Reynolds will be able to make moves that allow it to improve its profitability and grow in the long run. The ability to operate on its own allows for several changes such as an increase in research and development, new and increased marketing, product innovation, and of course acquisitions. As the company begins to find its way and generate a new path forward, I believe there is an opportunity for long-term investors to benefit along the way. Because of this, I started a position I plan on holding for quite some time.
First things first, while Reynolds Consumer Products is now a standalone company, the principal shareholder remains Packaging Finance Limited. It happens to control 77% of the voting power which means there is little outside shareholders can do to change the direction of the company if they disagree with the Billionaire owner Graeme Hart. The good news is that Graeme has made to me what seems to be seemingly intelligent moves over his career so I believe the success will continue.