I've had my issues with the valuation at Neenah Paper (NYSE:NP),
but this specialty paper company continues to execute at a high level
and the market has continued to reward that performance. While the
shares have been basically flat since my last update, that performance is still quite a bit better than those of comps like Glatfelter (NYSE:GLT), Wausau Paper (NYSE:WPP), and Ahlstrom.
Sluggish
European markets should be a challenge for the company's Technical
Products segment, but filtration and specialty products continue to
drive market-beating volume growth, while the fine paper business
remains a very profitable business. With the balance sheet flexibility
to add more revenue through M&A, I'm not worried about the company's
ability to continue generating value-added growth. I'm still not overly
excited about the valuation, with a DCF-based and EV/EBITDA-based
approach bracketing about (5%)-15% potential, but I'd keep an eye on
this name in the event that the market pullback takes these shares back
to a more interesting price.
Continue reading here:
Neenah Paper Continues To Execute
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