On February 3, Towards Packaging, a sister firm of Precedence Research, published its report on the U.S. packaging market that stands at a valuation of above $215 billion as of the end of 2025. As per the report, the market is expected to register a compound annual growth rate of 4% during the coming decade, reaching the $319 billion mark by 2035.
The report highlights structural shifts within the packaging segment, led by sustainability focus, e-commerce demand, and regulations. These megatrends will continue to reshape the underlying dynamics of the industry, and going forward, companies that adapt to these shifts will have an edge over their peers.
The Paper & Packaging segment is known for offering a lot of resilience against economic downturns due to essential demand and consumer staple reliance. Hence, it can add to portfolio diversification benefits, along with stable dividend payouts by profitable companies. Given that the sector is shifting toward sustainability through biodegradable packaging, continued innovation in the segment seems inevitable.
For prudent investors, it is essential to be selective about companies that are rapidly remaking themselves in line with the megatrends mentioned above.
With that background, let’s explore our 8 Best Paper and Plastic Packaging Stocks to Buy According to Hedge Funds.
Our Methodology
To identify stocks for this article, we screened U.S.-listed paper and plastic packaging companies with market capitalizations above $2 billion and share prices above $5. We also shortlisted only stocks with positive upside potential according to TipRanks consensus as of the February 6 close.
In the final part of the screening, we identified the number of hedge funds that held positions in these stocks as of the end of the third quarter of 2025. Finally, we selected 8 stocks with the highest number of hedge funds holding stakes and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
8. Avery Dennison (NYSE:AVY)
Number of Hedge Fund Holders: 27
Avery Dennison (NYSE:AVY) is one of the 8 best paper and plastic packaging stocks to buy according to hedge funds.
On February 6, the price target on Avery Dennison (NYSE:AVY) was raised from $215 to $224 by BMO Capital analyst John McNulty. The analyst maintained his Outperform rating on the stock following its fourth-quarter earnings beat. He forecasts growth and revaluation prospects for the company based on its focus on execution, positive secular trends, and better cash flows.
On January 6, Truist Financial also raised its price target for Avery Dennison (NYSE:AVY) from $213 to $234, maintaining a Buy rating on the stock. The upward revision now implies upside potential of more than 22%.
The firm expects slight weakness in packaging volumes in early 2026, but also noted that some CPGs are increasing volumes while successfully retaining price gains. The firm anticipates continued growth for beverage cans across North America and Europe, with expectations of price increments by containerboard producers due to their controlled supplies.
Avery Dennison (NYSE:AVY) is a materials science and digital identification solutions provider that operates through two segments, i.e., Materials Group and Solutions Group. It offers pressure-sensitive label materials, performance tapes products, converted products, and other adhesive-based materials. The company sells its products through brands like Avery Dennison, Fasson, and JAC.
Hedge Fund Resource Center