Overall Score: 6
Trading Chart: 1
Analyst Opinion: 1
| Strong Buy | 3 | |
| Buy | 2 | |
| Hold | 2 | |
| Underperform | 1 | |
| Strong Sell | 0 | |
Insider Trading: 1
Director Brown bought 17,000 shares at 44.26
Management Discussion and Analysis: 1
Sales benefited from price and volume increase in timber. Cellulose sales were strong with an increase in volume and price
Absorbent materials sales were stagnant as higher prices offset lower volume
Housing activity is a key driver for lumber demand
Eastman Chemical (15%), Celanese (11%) and Nanton Cellulose (11%) are top 3 customers
Union agreement for 700 employees (out of 1900) expires in June 2012
Commodity price risk (oil, natural gas and chemicals)
EPA and government regulation changes would negatively impact operating results
Environmental groups can curtail operations
Company is undertaking a $300mm project expanding it’s Jessup facility (performance fibers)
Company is focused on timberland acquisitions
$450mm credit facility maturing in 2106
Company has $847mm in debt
$117mm underfunded pension plan
Stock Performance Relative to Market: 1
Sector Outlook: 1
Long term fundamentals remain strong, 2012 volumes to improve over 2011 in timber and performance fiber with weakness in absorbent materials
Cash Flow: 1
Free cash flow (ex-acquisitions) is stable, but will be negatively impacted in 2012 due to higher CAPEX
| 2009 | 2010 | 2011 | ||
| Revenues | $1,169 | $1,315 | $1,489 | |
| COGS | 915 | 990 | 1,074 | |
| Gross Profit | 254 | 325 | 415 | |
| SG&A | 63 | 67 | 67 | |
| EBIT | 191 | 258 | 348 | |
| D&A | 158 | 143 | 136 | |
| EBITDA | 350 | 401 | 484 | |
| Capex | (92) | (138) | (145) | |
| Interest | (52) | (50) | (51) | |
| Working Capital | (30) | (12) | (9) | |
| Taxes | (46) | (15) | (30) | |
| FCF | 129 | 186 | 249 | |
| CFO | 307 | 495 | 432 | |
| CFI | (93) | (143) | (489) | |
| CFF | (202) | (78) | (215) | |
| Net Income | 331 | 229 | 231 | |
PEG Ratio: -1
| 4/11/2012 | |||
| P/E | 19.8 | ||
| 2011 | 2012 | ||
| EPS | 2.2 | 2.5 | |
| PEG Ratio | 1.45x |
Valuation: -1
Value Pro shows a 23% downside from the current price of $43.5.
Adjusted FCF for 7 yrs from 10 yrs
Adjusted growth rate to 10%
10 yr treasury at 3%
Company interest rate is 6%
Equity risk premium assumed at 5%
Beta is taken from finance.yahoo
Catalyst: 1
Stronger than expected pickup in home building activity will increase volume and pricing for timber sales