Atlantic Investment Management, Inc. has completely divested its entire holding in Graphic Packaging, a significant move valued at approximately $12.63 million. This strategic withdrawal comes amidst a challenging period for Graphic Packaging, marked by a substantial decline in its stock value and a noticeable reduction in profitability. The fund's decision, disclosed in a recent SEC filing, signals a clear shift in its investment focus, moving away from capital-intensive turnaround situations to embrace industrial sectors demonstrating more robust operational strength and cleaner earnings trajectories.
On February 17, 2026, details emerged regarding Atlantic Investment Management, Inc.'s complete exit from Graphic Packaging during the fourth quarter of the preceding year. The fund offloaded all 645,584 shares it held, an action that saw the position's quarter-end valuation decrease by $12.63 million, aligning with a full liquidation. Previously, this stake represented 7.3% of the fund's 13F reportable assets under management, underscoring the magnitude of this divestiture. Following this move, Atlantic Investment Management's top holdings now include AXTA, KEX, FLS, APTV, and OSK, indicating a repositioning towards these industrial entities.
The backdrop to this divestment is Graphic Packaging's performance, with shares trading at $12.37 as of February 17, 2026. This price reflects a stark 53.2% depreciation over the last year, a period during which the S&P 500 notably gained around 13%. Graphic Packaging, a prominent provider of fiber-based packaging solutions, offers a wide array of products including coated paperboard, folding cartons, and specialized containers. The company generates revenue through manufacturing and distributing these packaging materials and machinery to diverse sectors such as food, beverage, and consumer goods, serving a global clientele across the Americas, Europe, and Asia Pacific.
Despite its significant market presence and integrated manufacturing capabilities, Graphic Packaging's recent financial results have been concerning. While the company's 2025 results appeared solid superficially, underlying trends pointed to a downturn. Net sales saw a 2% dip to $8.6 billion, and net income plummeted from $658 million to $444 million year-over-year, largely due to margin compression. Concurrently, net leverage increased from 3.0x to 3.8x, even after substantial capital expenditures, including $935 million for its Waco project. Looking ahead, management anticipates $700 million to $800 million in adjusted free cash flow for 2026, yet this forecast comes with projections of lower adjusted EBITDA and EPS, ranging from $0.75 to $1.15, signaling persistent operational and inventory-related challenges. For long-term investors, this scenario suggests that the fund's decision was less a panicked reaction and more a display of stringent capital discipline, prioritizing investments in businesses with more predictable and positive earnings momentum.