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Stock of the week: RPC

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Ian Forrest, investment research analyst at The Share Centre, picks plastic packaging company, RPC as stock of the week.

Last week, RPC – which supplies a wide range of plastic packaging used from everything from jerry cans to fruit juice bottles and cleaning sprays to well-known household brands – reported its trading update for the first quarter. The company said that trading conditions continued to be encouraging, with revenues coming in at approximately £960m, materially ahead of the same period last year. It was driven by organic growth, acquisitions and favourable foreign currency movements.

RPC’s share price has had a fairly turbulent 2017 so far, despite the group reporting good full year and interim numbers. Certain analysts have taken a dim view of management’s recent acquisitions and accounting practices, which has created volatility.

However, investors should be cheered by the firm’s latest statement, which showed that the management’s focus will now turn to integrating current acquisitions over new ones. This should provide investors with some welcome relief.

We recommend the stock as a ‘buy’ due to the company’s good growth record and its potential for expansion through acquisitions as well as its progressive dividend.

We suggest this stock for investors looking for capital growth, some income and those who are willing to accept a medium to higher level of risk.

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