05-Oct-2020:  I did write this originally to agree with VeryBigWhale's $6 to $7 valuation for CCL which I thought was there or thereabouts.  However, that valuation has since been edited to zero, so I no longer agree with it.  CCL are worth something.  Anyway...

I certainly view CCL as being overvalued at current levels.  Mathan Somasundaram from Deep Data Analytics and Carl Capolingua from Think Markets covered CCL well on "The Call" on Ausbiz today (Monday 05-Oct-2020).

I worked at CCL's Thebarton factory for 11.5 years - until they closed it down a couple of years ago - right after moving all of their glass production there - to Thebarton (in Adelaide, South Australia), as well as relocating their fruit juice manufacturing from the SA Riverland to Thebarton.  So after spending millions relocating all of their glass and juice to Adelaide, and upgrading all of their Adelaide PET (plastic bottle) manufacturing lines to "blow-fill" - where bottles are blown (from small "blanks" that resemble test tubes with cap threads at the end) and filled at the same time - an upgrade which also cost millions... they closed the entire plant down and relocated their glass, aluminium can and juice manufacturing to Richlands (in Brisbane), and increased PET bottle production in Melbourne and Perth to cover SA and NT sales. They now do not maufacture anything in SA or NT.  These are just examples of the million of dollars that CCL management wasted during my time working for the company.  But there are a lot more. 

The other main thing to note is their huge debt, which is often ignored because they have such a wonderful logistics (distribution) network and huge sales, despite most of their sales categories continuing to decline - and they also have substantial cash flows which makes that debt looks reasonably easy to service.  But their net debt was $1.7 billion at June 26th 2020.  [$1.676 billion compared to $1.891 billion a year earlier.]

And that's their net debt - their ACTUAL debt is of course much higher.  Commsec lists CCL's ND/E (Net Debt to Equity) ratio as being 173.4%, which is WAY too high for me.  Debt is never a problem until it is.  Sure, interest rates are very low, and CCL is a BIG company that looks to be able to service that debt.  However, the main way they have been slowly reducing their debt (in the years that they have managed to reduce it) is by selling off assets, including part (percentages) of their Asian businesses, particularly their Indonesian bottling and distribution business, to TCCC - The Coca Cola Company - headquartered in Atlanta, Georgia, USA.  TCCC are the largest shareholders of CCL - with 30.8%, and when you consider that CCL only manufacture Coke products under licence from TCCC - a licence which has to be regularly renewed - TCCC really has CCL by the short-and-curlies.  It's obviously in TCCC's interests (for their own Coke brand and their investment in CCL) for CCL to stay in business, and make some money, but there is likely to be a limit as to how far TCCC are prepared to go to keep bailing CCL out when CCL's lenders get concerned about their debt levels versus their declining revenues.

CCL just do NOT tick many boxes for me:

• Low or no debt?  Nope!  Far from it!
• Great Management with a superb track record of excellent capital allocation?  Umm... Nope!
• Growing market share in a growing market?  Nope.  They usually manage to maintain their market share, but their market is actually shrinking, particularly for CSDs (carbonated soft drinks) and now even bottled water is losing popularity - people are favouring reusable bottles for water. They do have other markets, but those are their main markets.
• Moats?  (sustainable competitive advantages?)  Yes, but their moats don't appear to be growing, they appear to be getting slowly erroded by competition.  Not by Pepsi, but by private label and no-name (plain brand) offerings that are available at MUCH lower prices.  And by other types of beverage offerings.
• Smart money on the Register?  Nope.  They don't have a single Australian-based fundie as a substantial shareholder.  Their only two substantial holders are TCCC and Blackrock - and the US-based Blackrock only hold them for Blackrock's index-hugging ETFs.  TCCC (NYSE: KO) is CCL's largest supplier of raw ingredients and also the reason they exist at all.
• High founder or insider share ownership?  The founders are out of the picture and apart from their MD's (ex-Graincorp CEO Alison Watkin's) 367,101 shares (currently worth $3.55 million, which have been collected as part of her very generous remuneration package), the other 7 directors only own

1. 0 (zero),
2. 8,100,
3. 10,000,
4. 18,300,
5. 22,500,
6. 22,494, and
7. 42,000 shares.

• Excellent and innovative business model?  Sort of.  It works well enough, but I wouldn't call it particularly innovative and it's certainly not disruptive.  Their distribution (logistics) network and capabilities are certainly a big plus however.
• Able to withstand external shocks?  So far, yes, but they have not demonstrated the ability to grow at such times, just to survive.

They reported negative EPS (-1.2 cps) for H1FY2020 and a statutory loss of -$8.7m for the half (6 months to June 26th, 2020).  I expect the current half is going to be just as bad and probably worse, with the pandemic situation in Victoria and especially in Indonesia where it is MUCH worse than in Australia.  CCL have major bottling plants in Indonesia.

I believe there are far better places to put my hard earned than in CCL.  They have too many headwinds, and very few tailwinds, if any.