Is this one of the best value ASX blue-chip stocks on our market?

While the value versus growth debate for ASX shares rages on, one S&P/ASX 100 (Index:^ATOI) (ASX:XTO) stock is looking too attractive to ignore.

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The value versus growth debate for ASX shares rages on and isn't likely to be settled in the near-term as I believe the answer as to who's right won't become apparent until sometime in 2020.

I am leaning towards value as the growth trade is looking a little long in the tooth despite interest rates tumbling towards zero. Lower rates tend to benefit growth shares more.

I suspect we will see more of a rotation from growth to value in the not too distant future with the rebound of beaten down value stocks like the Nufarm Limited (ASX: NUF) share price and Orora Ltd (ASX: ORA) share price lifting sentiment towards the strategy.

Value vs. Growth

Value shares are typically those that trade at a discount to the market and/or their historical valuation. This usually happens because of their underperforming share price.

On the other hand, growth shares trade at a premium to the market as investors are willing to pay up because they are certain of the companies' strong earnings growth outlook. Think CSL Limited (ASX: CSL) and Afterpay Touch Group Ltd (ASX: APT).

Those who subscribe to my view and who are looking for opportunities among the large cap underperformers should put the AMCOR PLC/IDR UNRESTR (ASX: AMC) share price on their list as the global packaging giant's share price hasn't been this cheap since the global financial crisis (GFC), according to Macquarie Group Ltd (ASX: MQG).

Amcor shaping up to be a key value buy

The stock is trading at around a 14% discount to the S&P/ASX 100 (Index:^ATOI) (ASX:XTO) index as the Amcor share price only managed to inch up 4% this calendar year when the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index rallied 18%.

The stock has fallen out of favour in part due to the war on plastics. Amcor's customers are increasingly moving towards recyclable packaging and Unilever's aim to cut its plastic footprint by 14% by 2025 is a case in point.

Unilever is a large customer of Amcor's and its home and personal care products (like shampoos) accounts for around 6% of Amcor's group sales.

Next share price catalyst

"We think that the shift to multiple use packs has a greater potential to impact larger Rigids containers (shampoos/detergents) vs Flexibles in smaller pack sizes and where product convenience is a feature," said Macquarie.

"As a clear global market leader in Flexibles, and Rigids in the Americas, AMC is at the forefront of new product initiatives to help customers meet their 100% recycling targets by 2025.

"Bemis adds to AMC's product capability (film expertise) and AMC has recently released 100% recyclable products such as AmLite. We note that value add products have been positive for margin mix in the past (eg. stand-up pouches)."

The stock could jump next month when management holds its annual general meeting as the broker expects Amcor to re-iterate its 5% to 10% earnings per share growth for FY20 (on a constant currency basis).

Macquarie has an "outperform" recommendation on the stock with a 12-month price target of $17.19 per share.

Brendon Lau owns shares of Macquarie Group Limited and Nufarm Limited. Connect with him on Twitter @brenlau.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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