Thursday, June 11, 2015

Seeking Alpha: Glatfelter Has To Do Better

About a year ago, I wrote that Glatfelter (NYSE:GLT) could start to look more appealing as an under-the-radar pick if the company were to stop missing estimates. Since then the company has missed at the top line in every quarter, as forex headwinds, problems in Russia/Ukraine, and unexpected weakness in airlaid have sapped sales momentum. Add in some forced capex for boiler conversions and the prospect of greater environmental clean-up liabilities, and I think you could argue that the stock has done well to be down only 7% since that last article.

I like the prospects for Glatfelter to offset ongoing declines in uncoated freesheet volumes with greater volumes of engineered and specialty products. I also believe there is long-term upside from internal cost reduction efforts and an ongoing skew towards higher-value specialty products. Although the shares don't hold all that much appeal on a discounted cash flow basis, they are trading below 7x forward EBITDA and that's interesting given that I think the company can exceed 7% EBITDA growth over the next three to five years.

Read more here:
Glatfelter Has To Do Better

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