Sunday, December 20, 2015

Seeking Alpha: Orchids Paper Products Continues To Blossom

It's always encouraging to see stories develop in line with your expectations, and I really have nothing to complain about when it comes to Orchids Paper Products (NYSEMKT:TIS). The shares are up about 30% from April, when I wrote that the company's strategy of "controlled aggression" toward geographic expansion and its cost consciousness could serve investors well as a GARP story.

The story here continues to center around the growth potential of private label tissue products, the company's geographic expansion, and management's prudent approach to costs. Valuation is a more interesting topic to me though, as I think an argument can be made that a FCF-based target in the high $30s is not unreasonable. While that works back to a 10x multiple on 2016 EBITDA, a high multiple for a paper company, it might not be so unreasonable relative to the three-to-five year growth potential.

Read more here:
Orchids Paper Products Continues To Blossom

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