With A Name Like Glatfelter It's Got To Be Good!

Discussion in 'Stocks' started by stonedinvestor, Nov 19, 2006.

  1. Hello Folks. A long while ago I used that same heading on a stock called SMOD and indeed if you bought on my advice it's been a bumpy road, but now that Smart Modular has cleared out to the upside and is making you good money I thought I'd present another stock with a funny name- Glatfelter!

    GLT approx $15...

    This is a niche specialty paper company. There is good consolidation in this industry and I have been looking for exposure to it- they make all kinds of stuff: tea bags, coffee filters, textbooks, metalized labels for beer bottles, postage stamps!, adhesive tape, playing cards, laminate flooring, among many others. They are a mini 3M in the paper field!

    It's been a decade since this Co. was on any Traders radar but it's on mine now. Why?: They have decided to sell off a big portion of their timber assets 40,000 acres followed by 20,000 more this will bring the Co. roughly $150- $200 million the bet here- is they get far more than that! With ONLY 45 million shares outstanding this is HUGE.

    Recent acquisitions have jump started things at GLT in April 2006 they bought the carbonless and specialty paper business of New Page Corp. for $80 million. What a nice price when you consider New Page had sales of $440 million in 05! Not to mention production capacity of 440,000 tons of paper! Of course the low price came because the industry of carbonless paper is in decline-- but even so - they grabbed the lowest cost producer in North America and the second largest in market share.
    Glatfelter plans to shut a plant and switch operations over to the low cost New Page plant and include more of their specialty products and less carbonless paper. This will CUT costs by alot. In 2007 this acquisition is to add 50 cents to EPS-- since the synergies have taken longer than expected to pan out-- this is NOT reflected in the stock price.

    Let's take a breath. (1) The upcoming land sales not reflected in stock price. (2) The New Page Corp. buy not reflected in stock price... what else? Glatfelter plans to buy J.R. Crompton's Lydney mill in Britain for $65 million. This facility produces all the stuff Glatfelter already makes, tea and coffee filters, clean-room wipes etc. and had sales of $75 million. Another GREAT purchase I think, it gets them into Britain in a much bigger way as well as broadens their exposure into Asia. European regulators have not signed off yet on the deal, so the unit is now being operated as a stand - alone unit. Once the OK comes- more operating synergies to be found here.

    With NO major paper plants coming online in the next 2 years pricing should be in an upswing. 2007 is going to be Glatfelter's year! What's nice it's not the type of stock that will hurt you if we have a downturn... And it's a real deep value play, I think it goes to the low $20's....stonedinvestor.