I do not think the dividend is a problem but I would not expect any increases for quite awhile. When you look at their financial results depreciation is over $2 million per quarter and will be going up due to all the new plant and equipment. You really need to look at cash flow here at least in the short term. Once the new shares are added they will be paying about $3.5 million in dividends per quarter. They are not building the new plant in SC just to collect dust. It will take a little time to get all the projects settled but at the end of the tunnel this could be a very good company to own. I am long and will collect the dividend while they finish all the construction which should ultimately lead to share price growth.
I would add that we probably dont know what they can afford on a consistent basis for Dividends now because of an elevated level of growth capex. Wonder if anyone have any thoughts on maintenance capex? It would seem to be something difficult to determine because of their attempt at dynamic growth. Anywho best of luck.
True, but toilet paper is a commodity. My parents used Sears catalogs during the Depression in the outhouse.
Jefferies hasn't brought a decent offering to this market now for years. They fail at every turn. Jefferies use to be great now just bottom feeders.
Totally agree. If they have customers for the additional capacity of the new plant. The end of 2016/early 2017, this stock price will be much higher than the $22/$23 PPS now.
Looks like major holders are selling off. Average volume 40,795 and today 982,554 at 1:45 PM. This is a long term buy (2016) if they have customers for the added production in the new plant they should do well.
The stock offering date is 4/29.So the sell-off goes on. In a month it should be back to the $ 25-$ 26 dollar range.
I agree. With the new plant, they are shooting for growth. Obviously, if it goes according to their press release, it looks like they will get some benefit from the new plant by the end of 2015.
FROM THE PRESS RELEASE: The Company intends to break ground during the second quarter of this year. Build-out and start-up of the converting lines will come in phases, with the first line expected to become operational at the end of 2015 and the second line to become operational in the second quarter of 2016. Engineering and construction of the paper machine are expected to begin in the second quarter of 2015 and it is expected to become operational in early 2017.
Unfortunately, it looks like Mr. Jeffrey S. Schoen, shot the turkey. Company has a lot of potential. imo, but the CEO seem more interested in using the company as a personal piggy bank, with his ridiculously out-sized option grants.
well you have to spend money to make money. Corporate america over the last 6 years have been more concerned with cutting cost than growing their businesses while living off hteir cash cows. at some point you need to start creating new products, spending money to invest in the business, or the company dies.
I didn't think of something here.... its 1.5 million +1.5 million they had to spend only once... therefore they would have like 43 cents a share.. more than covering the dividend. They are great!
Sentiment: Strong Buy
Even in a mad max world we still need toilet paper. Social media would disappear in a apocalyptic world.
EPS is not a good number to use. Take a look at their operating cash flow, 2.44million net income + 2.46 depreciation add back gives us a positive operating. around 50 cents of operating cash flow for the quarter ending Dec2014.
those dilutive shares should be offset by the increase in EBITDA that is supposed to occur in the next quarter. Not a terrible time for them to issue stock given a ~20 P/E multiple. Looking forward to further information on their plans.
Even with 1.5 million per quarter from the new machine, they still would not be able to cover the dividend(roughly 31.2 cents a share vs 35 cents for the dividend).
the have 4 customers. Dollar store is 40% of sales.
That being said... management seems shareholder friendly. Company is expanding and making what seems to be the right move. The expansion with the new pyror plant is a good sign that they either have more customers, or one of their four customers is going to be purchasing more. you don't do a share offering to expand for a new plant with no prospects.
This is a risky stock, but they have a lot of things going for them. And, people will be buying toilet paper in all but the most extreme post apocalyptic environments. I am long, and have a buy recommend even to my family. But know what you are buying.
Yes, It is. I wouldn't be surprised if it was taken over. Could be the reason for the new CEO. Sometimes CEO's are chosen for one thing... to transition the company to be taken over.. SIAL is an example...
Sentiment: Strong Buy