“I probably could have made more money covering a sexier sector, but I have a visceral connection to manufacturing and eventually chose to narrow that to packaging,” says George Staphos. Although some analysts may look at the industry and see ordinary things like bubble wrap, plastic bags and cardboard boxes, the 46-year-old sees potential alpha — “if you know where to find it.” And find it he does, as money managers can attest. They have voted Staphos on to the All-America Research Team in Paper & Packaging (and predecessor sectors) 21 times since 1993, when he was with Paine Webber, through this year, when he ranks on behalf of BofA Merrill Lynch Global Research. He has topped the roster 12 times.
Staphos earned an MBA at Columbia Business School, then began his career at Paine Webber in 1985. He started out in the human resources department and worked his way up through research associate to senior analyst, where he covered both packaging and packaged foods. He began to focus exclusively on the former when he moved to Salomon Smith Barney, in 1998.
“From a career standpoint, the most important decision I ever made was to drop coverage of the food stocks in the late 1990s,” he explains. “While I enjoyed covering this group, the client overlap with packaging was relatively small. By focusing solely on packaging, I was able to increase my institutional market share, ultimately becoming No. 1–ranked in packaging in 1999.”
Staphos held that position for four consecutive years. He slipped to second place in 2003, as he was making the move to Banc of America Securities, where he expanded his coverage to include forest products — something he sees as an extension of packaging rather than a distraction, as the packaged-food companies had been. “Why would I need to go to anyone else?” one money manager asked Institutional Investor in 2006.
Staphos is noted for his humor. He advised clients to buy Owens-Illinois in February 2004 after the Toledo, Ohio–based container manufacturer unveiled plans to acquire Paris-based BSN Glasspack; the acquisition made the U.S. company the largest glass-container maker in Europe. When the stock failed to meet expectations, at least in the near term, he kept portfolio managers abreast of developments with reports titled “Is it ‘1996’ Yet?” and “Two Years Down the Road and ‘Nuthin’?”
“I try to inject humor into what would otherwise be a boring subject — we are talking about plastic and paper and such, after all,” he says.
