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FGE.to - Fortress Paper (formerly FTP.to)


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TD bank comes out with a forecast that loonie will be down to 85 cents. That would make 1035cdn pulp price.

 

IF all in cost include shipping can be down to 750,  there will be 150 profit margin per tonn. That is 30m.

 

The other line of business can generate another 40m or so ebitda down the road.

 

so we are trading at 2 to 3x on year out ebitda with the assumption that the 13 percent will stay.

 

Is the market pricing in weakening of dp price or no trust on Chad anymore

 

 

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TD bank comes out with a forecast that loonie will be down to 85 cents. That would make 1035cdn pulp price.

 

IF all in cost include shipping can be down to 750,  there will be 150 profit margin per tonn. That is 30m.

 

The other line of business can generate another 40m or so ebitda down the road.

 

so we are trading at 2 to 3x on year out ebitda with the assumption that the 13 percent will stay.

 

Is the market pricing in weakening of dp price or no trust on Chad anymore

 

 

 

there are times, where the market Switch to a Ultra depressive mode. everything which is probably good or things about the Business in General is not interesting for the market. mr market hates fortress right now. they must Show good results and then when time goes on, the market will apreciate it and fall in love more and more. These are the swings from Ultra negative to Ultra positive. we must stay the course and wait for better times  :)

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i am not unhappy, just want someone to poke holes rather. Because if u put a 6x on ebita, that is like 20 dollar stock ?

 

if it´s a 20$ or not i cant say excatly. for me the most important Thing is i see at least a double from this Level now. if this takes 2 years, i have a 50% yield per year.

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agree. u know we got series of downgrade when the duties was proposed. guess what, the dropping of loonie has reduced its effect pretty much yet this is near all time low.

 

yeah all time low. and this is exactly the Point. we have to stay Patient. so much negative noise around this Company. Panic mode.

1-2years away we see a better time and stock Price  :)

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i am not unhappy, just want someone to poke holes rather. Because if u put a 6x on ebita, that is like 20 dollar stock ?

 

Frankly, I can't poke holes into this. I am too biased, I suppose.

 

I did want to say that it is not uncommon to see a security paper (currencies and other official gov document) business have sold privately in the past for 10x EBITDA! Just look at De La Rue (https://www.google.com/finance?q=LON%3ADLAR) which is a competitor and even the stock market is pricing it at 10xEBITDA.

 

I am certainly not betting for the security paper business to sell for the 10xEBITDA, but at these prices today 100% is not very far fetched at all. FTP is certainly in deep value territory.

 

 

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Alertmeipp:

 

Agreed.  Preso same as before ... only tidbits I noted (vs his audio comments at the investor presentation) were bullet points on Landqart slide, where guides longer term visibility into their order book volumes,  as when indicates:

 

"• The Landqart Mill has a strong order book with orders currently exceeding budgeted levels

• Volumes are significantly higher than in 2012 and 2013; expect to remain so through 2014"

 

 

FYI -> Sappi released their quarterly results:

 

http://www.sappi.com/Investors/FinancialInformation/1Q%202014_2956_results/Q1%202014%20financial%20results%20booklet.pdf

 

Tidbits of note:

 

-> Selling all of their new capacity ... 286kt past quarter vs 175kt a year ago ... so there's definitely demand they are soaking up

-> Prices tied to NBSK list prices ... which are coming under pressure as NBSK list prices rise in a competitive VSF pricing environment.

-> They are benefiting from a lower Rand.

 

"The group has benefited from the strategic decision to invest in and grow the Specialised Cellulose business, with 286kt of dissolving wood pulp sold during the quarter (an increase of 63% over the equivalent quarter last year), generating US$74 million in EBITDA excluding special items at an EBITDA margin of 30%. We continue to benefit from our low cost position at each of our dissolving wood pulp  mills and the weaker Rand/Dollar exchange rate during the quarter.

NBSK paper pulp list prices, to which most of our dissolving wood pulp sales are linked, increased during the quarter, reaching its highest levels in two years. Due to the competitive nature of the market and weak viscose pricing, we expect increased pressure on our NBSK linked prices going forward.

 

-> Made allusions, but wouldn't elaborate on lower selling prices/higher costs for N. American DP plant (recently converted site in Minnesota), nor did they mention China anti-dumping.  But from the language, it sounds (unsurprisingly) that they directing production from N. American plant to non-Chinese customers, while redirecting (or augmenting) equivalent capacities from S. Africa to offset ... but at cost of discount to customer for doing so and/or increased shipping costs.

 

"Dissolving wood pulp production and sales volumes were close to full capacity with excellent quality. In optimising the global Specialised Cellulose business, we have seen lower average pricing and higher logistics costs in our North American operation, resulting in lower average returns for the business in North America."

 

 

 

 

 

 

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well, what a disappointing last couple weeks. Seems like a guy or two want to unload his or her inventory. Light volume but lack of buying interest is not helping.

 

No way to know, but I wonder if some selling is from people who missed the memo that the chinese decision was pushed back (was it only mentioned at that conference that Chad spoke at?) and are worried by the lack of news.

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Alertmeipp:

 

You're spot on ... It looks like someone from CIBC was selling for past week or two, up until first thing yesterday (when they dumped 6K shares on the market open, and not much since), and then there was very really until about late today, when someone via JonesTrading Canada started selling about 16K+ shares in the last hour or so.

 

http://web.tmxmoney.com/quote.php?qm_symbol=FTP  shows transaction history at the bottom.

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The seller has been patience until today. Interesting that it's from Jonestrading, its sales pitch is liquidity and hiding client intent. Liquidity and FTP seldom get put together.

 

Maybe some investors just can't stand this stuck at so low (for US investors, the loonie didn't help as well)  while the market is surging upward.

 

Hope they are done, it's cheap and I added today but I don't want to allocate too much as it's not risk free.

 

No PR from Fortress regarding the 2 months delay. No idea why someone would sell now. Hope we didn't miss something obvious.

 

My sense is Chad does not want to do too much promotion till the final tariff decision is known which makes sense. I think that they will not do any buyback till then as well.

 

 

The plan is to restart production March 2 or so, about 3 weeks ago.

 

 

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