Intertape Polymer Group (ITP.TO)

(A Top Pick Oct 03/17, Down 7%) They had 2 problems in their last quarter: input costs and shipping costs. It's a little economically sensitive, but now it's an attractive price.

CCL or ITP? CCL has great management and will benefit from global growth. They do labels and packaging for the big-branded companies. They're diversified and are generating a lot of free cash flow. ITP is a turnaround story. Amazon is their biggest customer. if you believe e-commerce will continue to grow then play ITP. ITP pays a higher dividend than CCL. Worries of higher input costs and a slowing economy are overblown. Sees good long-term returns from both.

The last two months of the year it normally does quite well. It has consolidated and is not moving up much here. It is in the right sector.

The current price is coming down to a base. It should hold and the indicators should turn up. Seasonality is November through June.

He thinks the dividend is sustainable. This is a Amazon play--all these packages need tape. The company received a big insurance settlement a year and a half ago and rebuilt a plant, then they got good business from Amazon and the result was booming growth. In recent quarters, there has been some disappointment. Longer term, he sees the company as well run, as one of the two largest players in the industry and he expects it will be fine. He is buying today against a $28 target price. He sees a substantial capital gain potential if a few things go right.

It has been under loved over the last year to a year and half. Their last earnings were a little light due to margin compression. Overall it is a good company. He expects more acquisitions this year. He thinks their earnings will start to move forward. It is a good value opportunity. (Analysts’ target: $23.00).

It is in the packaging space. They just acquired a packaging company. The stock has weakened recently because of input cost pressures and a facility in South Carolina that gave them some issues. They trade at a fairly low multiple compared to peers. He is doing some homework on this one because it could be a potential buying opportunity.

(A Top Pick July 6/17 - Down 30%.) Has not done as he expected to do. The story is that they built new facilities and expand in new areas. But they ran into some problems. The execution hasn’t been as good as he hoped for. Eventually he thinks it will work out, but it is taking longer than expected. He thinks the yield is safe.

They aim to be a global leader in packaging. They should benefit from e-commerce which needs boxes. They are busy building plants to meet expected demand, but it's eating their cash flow. A concern is that they buy a lot of chemicals that are made from oil (and oil prices are rising). It trades at a big discount vs. its peers. He's been buying this and expects it to return to the $20's.

This stock benefited from a run out of commodities a few years ago. There was an uptake in the success of Amazon and Google with the rise in consumer shipping. It has become too expensive now and he thinks it is not going anywhere – up or down. He would not be a buyer at these levels. He would want to see the yield back above 3.5% before re-entering.

It's been in a range spanning $3 that it needs to hold longer. He wants to see it break higher. It's trying to consolidate, which is good.

He's watching this. Packagaing companeis are doing well. It's come off recently, but ITP needs to see it sink further before he buys it. 13x forward earnings.

(A Past Top Pick on April 17, 2017, Down 14%) Had a rough year, though Q# and Q4 earnings were good. They gave guidance for 10% revenue growth and 15% earnings growth in 2018. They have a 5-7-year plan to double earnings and are doing acqusitions to achieve this. Lots of free cash flow with a decent yield. They make tapes that bind packages for the thriving e-commerce space.