Opinions
Barry Schwartz
KP Tissue Inc
KPT-T
HOLD
Sep 03, 2015
$13.970
Stock price when the opinion was issued
Consumer Products
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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research
KPT is a $101.6M company that pays a high yield of 7.1%. Its valuation is decent, but its balance sheet has been contracting for several years now. It's considered a consumer staples name, but we are not very impressed by the fundamentals or financials. Decent growth is expected over the next two years, but we would probably wait to see if fundamentals materially improve before investing here, given its negative momentum and contracting fundamentals.
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Consumer Products
Fundamentals have improved a lot since they went public. They sell branded tissue in Canada and private label tissue in the US. They have clearly laid out a roadmap of how their growth is going to happen and have delivered on that. Pays a very nice dividend. Got hurt by a rising US$ and input pricing. Better times are ahead. An excellent dividend which is fully covered. Expects that in the next 1-2 years, the company will be flush with cash and will either increase the dividends or launch another manufacturing plant to get a bigger share in the US. Dividend yield of 5%.