Billerud: Some Upside Is Here (Rating Upgrade)

(13min)

Summary

  • I prefer vertically integrated packaging and forestry companies like UPM Kymmene due to their insulation from volatile trends and high CapEx requirements.
  • Billerud AB has potential upside but remains risky due to recent forest sales, dividend cuts, and volatile fundamentals, despite recent management improvements.
  • Current valuation is high at 18.24x P/E with a negative 10-year return; I recommend a conservative buy at a lower P/E multiple.
  • Billerud fulfills 4 out of 5 investment criteria, making it an attractive buy with a potential turnaround expected in the coming years.
  • Looking for more investing ideas like this one? Get them exclusively at iREIT®+HOYA Capital. Learn More »

Elevated/drone view of an adventure cyclist on his gravel bike in the forest on a cold but sunny winter"s morning

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Dear readers/followers,

When it comes to investing in Paper, cartons, packaging materials, and forestry companies, I prefer the vertically integrated businesses. I'm talking about businesses like UPM Kymmene (OTCPK:UPMMY), which is a massive (2%+) position

The company discussed in this article is only one potential investment in the sector. Members of iREIT on Alpha get access to investment ideas with upsides that I view as significantly higher/better than this one. Consider subscribing and learning more here.

This article was written by

Wolf Report profile picture
33.81K Followers

Wolf Report is a senior analyst and private portfolio manager with over 10 years of generating value ideas in European and North American markets.

He is a contributing author and analyst for the investing group iREIT®+HOYA Capital and Wide Moat Research LLC where in addition to the U.S. market, he covers the markets of Scandinavia, Germany, France, UK, Italy, Spain, Portugal and Eastern Europe in search of reasonably valued stock ideas.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of UPMMY, BLRDF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice. It may be structured as such, but it is not financial advice. Investors are required and expected to do their own due diligence and research prior to any investment. Short-term trading, options trading/investment and futures trading are potentially extremely risky investment styles. They generally are not appropriate for someone with limited capital, limited investment experience, or a lack of understanding for the necessary risk tolerance involved. I own the European/Scandinavian tickers (not the ADRs) of all European/Scandinavian companies listed in my articles. I own the Canadian tickers of all Canadian stocks I write about. Please note that investing in European/Non-US stocks comes with withholding tax risks specific to the company's domicile as well as your personal situation. Investors should always consult a tax professional as to the overall impact of dividend withholding taxes and ways to mitigate these.

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