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


Liberty

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Thanks, yes, more aggressive, and buyers just wait for their bid to get hit and not willing to bid this one up. I checked around and dont see any new news or development, in fact, viscose market is firming up and last i heared the shutdown is on schedule. Hope the selling is more a personal call.

 

holding tight

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Thanks for comforting info. I think we will hear about production resumption in a week or two.

 

I pretty much bought back the shares I sold early this year last couple weeks, too early. I am very tempted to get more but my position getting big. I really like the risk/reward. I keep telling myself maybe I should take advantage of those constantly selling instead of worrying about it. EV is close to 150m.

 

Just taking off that 13%, Thurso will get ~45m a year!

 

But I thought 4 bucks was bargain as well.... duh.

 

 

 

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  • 2 weeks later...

I have been adding as well.  :-\

What do you think of the non-stop selling with low volume? Down ~25% YTD with ~5% of the float trade.

 

Seems like pretty small daily volumes in aggregate.  The market is clearly in "show me" mode at this point. Too many promisees have not been kept by management  and that leads to a nervous shareholder base.

 

Also, I've been monitoring some of the trading (more for personal clarification) and I've noted a good amount of swing trading lately. I've taken a picture of the level 2 below .... You'll see that a buy order for 11,000 @ 3.24 was entered at 15:19:46 and moments later a sell order input for 11,000  shares on the sell side at 3.46.  That small trade gives about 6.8% return gross of transaction cost and tax. The volatility in the share price could easily make this trade successful. Seems like the short term trades are moving the stock as the long term shareholders just sit and wait ......

 

 

http://i728.photobucket.com/albums/ww289/MikeNCathy/ftp_zps1acd6090.png

 

 

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IIROC has reduced the margin requirement for FTP as of March 3, 2014.

 

During the last year of volatile trading in FTP stock the margin was increased from 30% to 50%. I think this contributed to a good amount of selling in the stock as investors who were too highly levered were required to either post margin or sell out. As of today, IIROC has reduced the margin back to 30% from 50%.

 

It will be interesting to see if it has the reverse effect whereby investors begin to use their increased buying power to acquire more stock while its down.

 

http://docs.iiroc.ca/DisplayDocument.aspx?DocumentID=EEF4ADF8C9064FAABE886965AD68BF87&Language=en

 

 

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Now we're back into analyzing economics of NBHK, at least in the near term.

 

COST

If target cost structure for DP is $810 CDN delivered to China, then it is $720 or so undelivered.  And if can produce 25% more NBHK for same price as DP, then target cost is $575ish CDN undelivered ... which conforms to earlier analyses.

 

PRICE

On price side, NBHK not quoted too regularly, but recent listing shows list price at $870 USD.  http://www.risiinfo.com/pulp-paper/news/Alberta-Pacific-announces-Jan-1-price-increases-on-NBHK-NBSK-pulp-in-North-America.html

 

If convert that to CDN at .90 and then take 28% discount from list, you get current $696 CDN net price (ie 870 / .90 x .72)

 

 

If factor in cost to deliver (locally, say at $25/tonne), then guess they might be able to make $100/ton (or $25M/yr if 250K tons/yr)

 

Lots of ifs ... but having the CDN dollar at $.90 USD vs $.96 USD that it was in early November sure helps.  Downside remains all of the S. Hemisphere capacity coming into the market, offset by NBSK price hikes causing big delta in price with NBHK price (and therefore incentive for substitution).

 

We'll see.

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My favourite initiating report on FTP - "Money Does Grow on Trees" - wow what a contrary report this was....

 

Marc Robinson, (416) 943-4224, mrobinson@cormark.com

Maggie Johnson - Associate (416) 943-6733, mjohnson@cormark.com

 

INDUSTRIALS & SPECIAL S ITUATIONS

 

January 6, 2011 Fortress Paper Ltd.

 

Money Does Grow On Trees

 

All figures in C$ unless otherwise denoted

 

We are initiating coverage on Fortress Paper Ltd. with a Top Pick

recommendation and a $65 target price. We believe now is an ideal time

to invest in each of Fortress’ three pulp and paper-related operating assets:

 

• The conversion of Thurso from a high-cost NBHK producer to a lowcost

dissolving pulp producer is on time and budget and slated for a

Q3/11 launch. We believe dissolving pulp prices should remain strong,

at $1,300/MT, supporting values well above those implied currently. We

ascribe a strong likelihood to Fortress sourcing additional capacity in

2011 which has the potential to drive valuations significantly higher.

 

• Dresden enjoys a dominant competitive position in the growing nonwoven

wallpaper industry. The majority of capacity expansions are now

complete, with EBITDA set to grow by double digits annually. Longer

term, management sees the market doubling, necessitating further

value enhancing development.

 

• The recent $50 MM facility upgrade at Landqart extends high-margin

security paper capacity fourfold, enabling multi-year EBITDA growth.

This investment has already been made. Two large industry players are

now mired in scandal, creating an opportunity to poach business or

acquire the targets outright. Either scenario could see Landqart reach

scale quickly, enabling a spin-out on an accretive basis.

 

A sum of the parts valuation drives $63.88 per share. Be it more dissolving

pulp capacity or realized prices closer to the current spot price, an

acquisition and/or spin-out of Landqart, or capacity expansion or LBO of

Dresden, there is substantial upside to this valuation if management is able

to execute on its current plans. We therefore launch on Fortress with a $65

target and Top Pick recommendation.

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Haha. Well, Fortress just needs to tread water for a couple years and perhaps it will live to see $1300/mt again.  With NBHK capability, Dresden cash, and Landquart not bleeding it dry it just may see that day.  Who knows, we may even see some things go FTP's way like the end of those ludicrous tariffs.

 

My favourite initiating report on FTP - "Money Does Grow on Trees" - wow what a contrary report this was....

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My favourite initiating report on FTP - "Money Does Grow on Trees" - wow what a contrary report this was....

 

Marc Robinson, (416) 943-4224, mrobinson@cormark.com

Maggie Johnson - Associate (416) 943-6733, mjohnson@cormark.com

 

INDUSTRIALS & SPECIAL S ITUATIONS

 

January 6, 2011 Fortress Paper Ltd.

 

Money Does Grow On Trees

 

All figures in C$ unless otherwise denoted

 

We are initiating coverage on Fortress Paper Ltd. with a Top Pick

recommendation and a $65 target price. We believe now is an ideal time

to invest in each of Fortress’ three pulp and paper-related operating assets:

 

• The conversion of Thurso from a high-cost NBHK producer to a lowcost

dissolving pulp producer is on time and budget and slated for a

Q3/11 launch. We believe dissolving pulp prices should remain strong,

at $1,300/MT, supporting values well above those implied currently. We

ascribe a strong likelihood to Fortress sourcing additional capacity in

2011 which has the potential to drive valuations significantly higher.

 

• Dresden enjoys a dominant competitive position in the growing nonwoven

wallpaper industry. The majority of capacity expansions are now

complete, with EBITDA set to grow by double digits annually. Longer

term, management sees the market doubling, necessitating further

value enhancing development.

 

• The recent $50 MM facility upgrade at Landqart extends high-margin

security paper capacity fourfold, enabling multi-year EBITDA growth.

This investment has already been made. Two large industry players are

now mired in scandal, creating an opportunity to poach business or

acquire the targets outright. Either scenario could see Landqart reach

scale quickly, enabling a spin-out on an accretive basis.

 

A sum of the parts valuation drives $63.88 per share. Be it more dissolving

pulp capacity or realized prices closer to the current spot price, an

acquisition and/or spin-out of Landqart, or capacity expansion or LBO of

Dresden, there is substantial upside to this valuation if management is able

to execute on its current plans. We therefore launch on Fortress with a $65

target and Top Pick recommendation.

 

Hmm. He puts out Dresden as one of the operating assets?

 

Would you mind sharing the complete report? Thanks!

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