Seeking Alpha
All posts from Seeking Alpha
Seeking Alpha in Seeking Alpha - Read, Decide, Invest.,

Domtar Corp.: A Paper Worth Holding

The Domtar Corp. ([[UFS]]) stock is down 30-40% over the last one year, even though the health of the North American pulp & paper industry has improved over the last few years. Recently, a stronger U.S. dollar and an increase in imports have brought back worries about the competitive viability of the space, including Domtar. A closer look suggests that the story has fundamentally improved and adopting a balanced outlook may serve investors better, since improvement in fundamentals has just started to flow down to the numbers. Even though not a major top line growth story, consistent value is being created for the shareholders and stock trading close to 5 times EV/ EBITDA with strong cash flows is pointing towards a significant upside that is being left on the table.

Besides the usual concerns associated with a matured commodity industry like paper & pulp, concerns over a stronger… Read More …