Opinions
Barry Schwartz
KP Tissue Inc
KPT-T
BUY
Oct 16, 2017
$15.090
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
As a hold for the next 5 years?On a total return basis, this is not as terrible as the stock price suggests. It has underperformed. There has always been something that pops up to hurt them over the past few years. It looks like pulp prices continue to go higher, so he doesn’t expect the best quarter in Q3. However, they have pricing power because their branded tissue toilet paper has been able to pass those price increases on to customers. He likes this for the 4.7% dividend. They have ambitious growth plans.