finetrader Posted November 24, 2013 Share Posted November 24, 2013 A follow up question. If they continue to sell DP to chinese customer. What do you think will happen? The chinese customer will pay the full anti-dumping duty? Fortress will lowered their price so to split the duty cost (50/50)? Or Fortress will lowered their price so to assume the full duty cost? Thanks again! Link to comment Share on other sites More sharing options...
sculpin Posted November 25, 2013 Share Posted November 25, 2013 Some info on NBSK mkts... October Pulp Stats Show Extremely Tight NBSK Markets; NBHK Outperforming Other Hardwood Grades Daryl Swetlishoff, CFA daryl.swetlishoff@raymondjames.ca 604.659.8246 ___________________________________ Event The pulp and paper products council released pulp stats for the month of Oct-2013 Friday morning revealing extremely tight NBSK pulp markets and an interesting divergence among hardwood pulp grades with NBHK holding up better than Eucalyptus and Southern hardwood pulp. We are increasing our target price on Mercer International to $10.75 from $9.00. Recommendation As a result of a favourable relative valuation, upgraded and strategically located assets, a larger, more secure fibre basket (vs. Eastern Canadian and European competitors) and growing energy business, we recommend investors add to positions in Outperform rated Canfor Pulp. Analysis Softwood markets swing further to producers favour - With a robust 99% operating rate and inventories down 3 to 24 days supply (and well below balanced levels of ~30 days) we highlight the tightness of current softwood pulp markets as driving NBSK pulp prices to a 2-year high of US$990/mt. The key number in these stats, reduced inventories, was a product of fall maintenance downtime, some other mill outages and the closure of the Tofte pulp mill in Norway. By region total October pulp shipments to China increased 36.3% y/y and are up 4.6% YTD while NA and W. Europe were essentially flat y/y and up 5.7% and 0.5% YTD, respectively. Increased capacity starting to hit eucalyptus grades NBHK holding up relatively well - Likely the greatest source of concern facing global pulp markets currently is the large amount of hardwood capacity expected to come on in the Southern Hemisphere between now and the end of 2014. In this regard we believe it is interesting that Eucalyptus pulp operating rates are down to 86% (90% YTD) while NBHK operating rates remain strong at 95% (95% YTD). Overall hardwood pulp inventories rose one day to 43 (and are slightly above balanced in our view) and we note demand from China was particularly strong, up 50.9% y/y (up 13% YTD) while NA shipments are up 6.9% YTD and W. Europe is down 0.8% YTD. We note the fact that NBHK is holding up relatively well is a modest positive for Fortress Paper who began shipping NBHK during October. Pulp equities still undervalued despite recent run - While pulp levered stocks in our coverage universe are up an average of ~30% from spring lows (vs. the TSX up 1%) we note they remain 25% below mid-2011 highs when pulp prices last reached current levels. We acknowledge discounts to pulp list prices are currently wider (vs. mid-2011) and the aforementioned hardwood capacity increase is a risk, however, we continue to see these equities as undervalued given the circumstances. Our top pick among the pulp and paper companies in our coverage universe remains Canfor Pulp, which we expect will benefit from earnings momentum in coming quarters related to rising energy revenues with the company's Northwood turbine project completion (Apr-2014) and evidence of cost reduction initiatives. Our increased $10.75 target price for Mercer is based on a 7.0x 2014E EV/EBITDA multiple, a premium to the group average of 6.0x due to the company's industry leading energy production and associated high earnings quality. We also remain constructive on Domtar and reiterate our positive view of the company's most recent personal care acquisition as we see the stock benefitting from multiple expansion as the company continues to diversify into businesses with positive demand growth, offsetting declining white paper demand. Link to comment Share on other sites More sharing options...
tombgrt Posted November 25, 2013 Share Posted November 25, 2013 A few days ago I bought back a part from what I sold back at much higher prices earlier this year. At the low point I still had 1/3th left compared to my full position many months ago, now it's around 6/10th but obviously at a much lower dollar outlay. As I have said a few times in the past, I still think there could be quite a lot of value in Landqart over time. I'm curious to see this develop further. A major part of my (perceived) margin of safety in this investment came from Dresden as it covered for most of the losses that were coming from the DP division. When Dresden fell away that Margin didn't feel quite the same but in hindsight it was obviously needed! The buyer got a good deal imo and Chad likely wouldn't have sold if he didn't have to. Regarding Chad: Don't feel bad for the guy, he got most of what he got in FTP "for free" anyway and this leveraged play gave him an extreme amount of possible additional upside if things went his way. No matter what FTP does from here, it gave me lots of invaluable lessons that will likely prove to be well worth it's final price, given that the mistake was made so early in my investment career. I'll try to write them all down some day. ;) Link to comment Share on other sites More sharing options...
alertmeipp Posted November 27, 2013 Share Posted November 27, 2013 that is worrysome given ur track record with this. ;) Link to comment Share on other sites More sharing options...
triedtestedand Posted November 28, 2013 Share Posted November 28, 2013 Per attached graph of DP imports to China month-over-month, awaiting to see what next month's graph looks like ... Link to comment Share on other sites More sharing options...
alertmeipp Posted November 28, 2013 Share Posted November 28, 2013 i think nov will be bad given what was happening. some medium report the market was quiet until now, offer price is 920 to 950, a good start. do you still see thurso being low 25 percent producer in term of cost after all these? Link to comment Share on other sites More sharing options...
lessthaniv Posted November 28, 2013 Share Posted November 28, 2013 cross your fingers for a very white Christmas!! http://online.wsj.com/news/articles/SB10001424052702304465604579222131735500234 Link to comment Share on other sites More sharing options...
finetrader Posted November 28, 2013 Share Posted November 28, 2013 now tell me this has nothing to do with the anti-dumping duty on DP.. Link to comment Share on other sites More sharing options...
triedtestedand Posted November 28, 2013 Share Posted November 28, 2013 http://www.just-style.com/analysis/chinese-cotton-auction-unlikely-to-dent-stockpile_id119897.aspx http://www.brecorder.com/cotton-a-textiles/185/1259578/ This should become a Harvard Business Review classic in how to distort a market. One thing I learned in the article linked to above is that the cotton that Chinese farmers are planting has transitioned to lower quality stuff (why not ... if it's cheaper to grow ... and you still get guaranteed sale at guaranteed price). Link to comment Share on other sites More sharing options...
lessthaniv Posted November 29, 2013 Share Posted November 29, 2013 The excess cotton supply in the hands of the Chinese is reported to be of low quality and it's being sold at a 70% premium to US prices. In the last auction on 25% was taken up. I've also read, the longer it sits the more brittle the fiber becomes too. Link to comment Share on other sites More sharing options...
finetrader Posted November 29, 2013 Share Posted November 29, 2013 Just bought some 2016 6.5% debenture. Did not get the price I was expecting but I wanted some pretty bad Very illiquid I figured the upside is quite good with not much risk on the downside EDIT: illiquid indeed. No wonder why management don't want to buy small lots that would move the price up for minimal result for them Link to comment Share on other sites More sharing options...
alertmeipp Posted November 29, 2013 Share Posted November 29, 2013 the convert is a good one and has outperformed the common lately. At least you get paid to wait. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 29, 2013 Share Posted November 29, 2013 wow, common drifting lower daily. anyone buying? I am. Link to comment Share on other sites More sharing options...
obtuse_investor Posted November 29, 2013 Share Posted November 29, 2013 wow, common drifting lower daily. anyone buying? I am. I didn't today-- but I expect there will be additional opportunity soon. There likely will be some tax loss selling as we approach Dec 31. Also volume is bound to be very low in general as we get into end of December. That is a great time to buy cheap for the patient investor armed with a limit order. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 29, 2013 Share Posted November 29, 2013 part of the reason i didnt wait is i know this one will run away quick if a bigger buyer shows up. why would sellers wait till end of dec to sell, many tax loss selling happen around this and next week i would think. check out last year trading pattern. Link to comment Share on other sites More sharing options...
obtuse_investor Posted November 30, 2013 Share Posted November 30, 2013 I should clarify-- I didn't buy today because I was distracted by my day job. :-) If fortress never hits 52week low again, I would be satisfied with my average cost. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 30, 2013 Share Posted November 30, 2013 I should clarify-- I didn't buy today because I was distracted by my day job. :-) If fortress never hits 52week low again, I would be satisfied with my average cost. LOL, and some of us were also busy with Black Friday shopping today. If there is one thing that FTP is good at, it is hitting 52 weeks low. So your chance is good. We all want lower price when buy. I am happy with the price I paid today. I figure every $50 DP price increase gives me ~50%+ increase in value here. At one point this morning, I thought this is going to run away but a few k shares change the dynamic. Seems the big sellers are gone for now but still some supplies for sure. Cotton is surprisingly strong given the Chinese reserve news and looks like the Viscose producer is finally going to restock soon, every investment is different. Off to vacation! Link to comment Share on other sites More sharing options...
OptsyEagle Posted November 30, 2013 Share Posted November 30, 2013 If there is one thing that FTP is good at, it is hitting 52 weeks low. Well, I suppose every company has to be good at something. lol. Link to comment Share on other sites More sharing options...
Parsad Posted November 30, 2013 Share Posted November 30, 2013 If there is one thing that FTP is good at, it is hitting 52 weeks low. Well, I suppose every company has to be good at something. lol. LOL! That was a good one. Cheers! Link to comment Share on other sites More sharing options...
alertmeipp Posted December 1, 2013 Share Posted December 1, 2013 If there is one thing that FTP is good at, it is hitting 52 weeks low. Well, I suppose every company has to be good at something. lol. LOL! That was a good one. Cheers! Yeah, even better if you own it. Nice moat that not many can copy. LOL Link to comment Share on other sites More sharing options...
Parsad Posted December 1, 2013 Share Posted December 1, 2013 If there is one thing that FTP is good at, it is hitting 52 weeks low. Well, I suppose every company has to be good at something. lol. LOL! That was a good one. Cheers! Yeah, even better if you own it. Nice moat that not many can copy. LOL How can they not copy it? Can't someone just plop down $500M and build a plant after getting regulatory approval? Cheers! Link to comment Share on other sites More sharing options...
Liberty Posted December 1, 2013 Author Share Posted December 1, 2013 If there is one thing that FTP is good at, it is hitting 52 weeks low. Well, I suppose every company has to be good at something. lol. LOL! That was a good one. Cheers! Yeah, even better if you own it. Nice moat that not many can copy. LOL How can they not copy it? Can't someone just plop down $500M and build a plant after getting regulatory approval? Cheers! I think he was making a joke about the talent for reaching new 52wk lows :) Link to comment Share on other sites More sharing options...
alertmeipp Posted December 1, 2013 Share Posted December 1, 2013 Thanks, Liberty. Was definitely trying to be funny. :o But maybe he got it. If a company really put in 500M to replicate Thurso, its stock should go down pretty good. Link to comment Share on other sites More sharing options...
phil_Buffett Posted December 3, 2013 Share Posted December 3, 2013 absolutely amazing how the stock Drops lower and lower. Link to comment Share on other sites More sharing options...
lessthaniv Posted December 3, 2013 Share Posted December 3, 2013 while the stock and further dated debentures have fallen as of late, the near term debenture has moved up. ;) Link to comment Share on other sites More sharing options...
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