$TG PART THREE Richmond, Virginia -based Tredegar
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Posted On: 04/02/2017 12:19:39 PM
$TG PART THREE Richmond, Virginia -based Tredegar Corporation (NYSE:TG-$17) is a diversified industrial manufacturer , with its business embracing three segments: manufacture of plastic films, elastics, and laminate materials primarily utilized in personal care materials (i.e. diapers, feminine hygiene, adult incontinence) and surface protection films: flexible packaging films produces polyester-based films for use in specialized packaging applications , and its aluminum extrusions produces aluminum for building and construction, distribution , transportation, and consumer durables markets.
With 33 million shares, $65 million of net debt and trading at just over 7 x 2018 EBITDA, Tredegar is a long term call on CEO John Gottwald turning around the challenged parts of Tredegar and either potentially splitting up or selling the businesses.
The Gottwald family owns 22% of Tredegar and is vested in the company's turnaround.
Tredegar's aluminum extrusions business is a high quality, high cash flow business benefitting from the "aluminization" of auto structures and a gradual recovery in non-residential construction. Flexible packaging is at a trough in its cycle as emerging markets demand recovers and industry supply and demand balance.
While PE films has been challenged by key customer Procter & Gamble diversifying its supplier base and substitutes for surface protection films, the value in aluminum extrusions and flexible packaging supports most of the current stock price.
A turnaround in PE films or increased outsourcing by Kimberly Clark are very cheap options for a Tredegar shareholder. If one transpires, Tredegar should be a $20 stock by yearend 2018, alongside a 2.6% dividend yield. If both transpire, Tredegar should trade well into the $20s."
The quality of Mario's quick response within a four day window and all the others which also started flowing in truly touched me. I wrote "Dear Mario: Thank you for the new F of F pick. Response from my friends has been great and touching. It looks like I will get out a new F of F issue one more time with everyone helping. Honestly, I didn't think we had a chance.
Thank you for being a friend all these years and I hope I have been a good friend to you. My best. Bob. (I hope all my other Favorites of the Famous participants will also accept my gratitude).
With 33 million shares, $65 million of net debt and trading at just over 7 x 2018 EBITDA, Tredegar is a long term call on CEO John Gottwald turning around the challenged parts of Tredegar and either potentially splitting up or selling the businesses.
The Gottwald family owns 22% of Tredegar and is vested in the company's turnaround.
Tredegar's aluminum extrusions business is a high quality, high cash flow business benefitting from the "aluminization" of auto structures and a gradual recovery in non-residential construction. Flexible packaging is at a trough in its cycle as emerging markets demand recovers and industry supply and demand balance.
While PE films has been challenged by key customer Procter & Gamble diversifying its supplier base and substitutes for surface protection films, the value in aluminum extrusions and flexible packaging supports most of the current stock price.
A turnaround in PE films or increased outsourcing by Kimberly Clark are very cheap options for a Tredegar shareholder. If one transpires, Tredegar should be a $20 stock by yearend 2018, alongside a 2.6% dividend yield. If both transpire, Tredegar should trade well into the $20s."
The quality of Mario's quick response within a four day window and all the others which also started flowing in truly touched me. I wrote "Dear Mario: Thank you for the new F of F pick. Response from my friends has been great and touching. It looks like I will get out a new F of F issue one more time with everyone helping. Honestly, I didn't think we had a chance.
Thank you for being a friend all these years and I hope I have been a good friend to you. My best. Bob. (I hope all my other Favorites of the Famous participants will also accept my gratitude).
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