Insights

Why the Amcor (ASX:AMC) share price is having a rough start to 2021

The Amcor CDI (ASX: AMC) share price is having a rough start to the year, down 5%. Here’s why this packaging giant isn’t in the good books
The post Why the Amcor (ASX:AMC) share price is having a rough start to 2021 appeared first on The Motley Fool Australia. –

A white arrow point down into the ground against a blue backdrop, indicating an ASX market crash or share price fall

The Amcor CDI (ASX: AMC) share price is having a rough start to 2021. At the time of writing, Amcor shares are trading at $14.39, up 0.56% for the day. Even so, that means that Amcor is a good 5.5% below where it started 2021 at when its share price was $15.16.

Until yesterday, the S&P/ASX 200 Index (ASX: XJO) was up around 1.4% for the year. Even on today’s levels, the ASX 200 is down 0.9% year to date.

That means that Amcor is significantly underperforming the broader market, whichever way you look at it. So what’s going on with Amcor share price in 2021 so far?

Who is Amcor?

Amcor is a packaging company best known for manufacturing boxes and other packaging for goods such as food and tobacco, home and healthcare products, and industrial goods.

It listed on the ASX way back in 1969. Today, it is a global company with operations on every continent around the world (except Antarctica of course). It’s even dual-listed on the New York Stock Exchange under Amcor plc (NYSE: AMCR). The company is also a component of the S&P 500 Index (INDEXSP: .INX).

Looking at the Amcor share price, we can see it is a highly cyclical company. If an investor had held Amcor shares since March 2009, they would be sitting on a very respectable return of roughly 324%. However, anyone who held shares since early 2016 would have seen their shares go essentially nowhere.

Despite this, the Amcor share price is still up more than 42% since it reached a 7 year low of $9.87 in March last year.

Why is the Amcor share price having a rough start to the year?

As we touched on earlier, Amcor shares have not joined the party in 2021, falling where the broader market has been mostly rising.

There is no obvious reason why this is the case. The company has made no market-sensitive announcements this year, apart from some standard director forms and regulatory paperwork.

A likely explanation is the rise of the Australian dollar. Since Amcor is an internationally-based company, it is affected by fluctuations of the Australian dollar in foreign exchange markets.

Between 28 December and 26 January, the Aussie dollar has appreciated by more than 2% against the US dollar. That directly impacts a company like Amcor because they get less bang for their buck when swapping US dollars back to Aussie dollars.

 Many investors like to pursue companies like Amcor because they are relatively stable and reliable dividend income payers. Individuals, businesses, and governments need boxes and packaging all of the time. That makes this company useful to investors who favour reliability of earnings. Amcor (unlike most ASX shares) also pays a dividend every quarter.

On current pricing, Amcor is offering a trailing yield of 2.63%. Government bond yields have also been rising over the past month or so, particularly over in the US. That reduces the appeal of dividend shares like Amcor because bonds are simply a safer alternative. This could also be playing a role.

It’s probably a combination of these reasons that explains why we are seeing Amcor sell off over the first month of the year so far.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Amcor (ASX:AMC) share price is having a rough start to 2021 appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!