Orchids Wilts In The Summer Heat

The second quarter results from Orchids Paper Products (NYSEMKT:TIS) are a case-in-point as to why I always drone on about "margin of safety" and risk/reward when talking about whether or not to buy a stock. I continue to believe that Orchids is a very well-run paper products company with a bright future and significant growth potential, but the second quarter was a pretty significant example of how "stuff happens" that can't always be fully modeled or predicted.

Based upon what management said on its call, the third quarter (and perhaps the fourth quarter as well) is likely to be more challenging than previously expected, so it is quite possible that these shares go into the penalty box until nice, predictable (hah!) growth comes back into the financials. For my part, an off quarter or two caused by things that just happen in the course of business is no real reason to panic and I think the valuation on the shares is now quite a bit more interesting.

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Orchids Wilts In The Summer Heat