Smith (ds) Share Discussion Threads

[scooper72] 07/4/2021 15:06

They're too busy buying up the cloud and investing in the future.

[marksp2011] 07/4/2021 14:24

If I was Amazon I would buy a box maker

[ygor705] 07/4/2021 12:58

Moorsie.......our views on this stock and others in the sector have run parallel for some years now. With recovery probably underway (or in prospect) in most of the developed world and liquidity likely to be slopping over the side of the US economy like an over-full barrel, do you think that we're going to see a move by a big US player into this area during the next 12 months?

[fairtrader66] 01/4/2021 18:30

What we need is a really well-crafted board paper. Something to settle those card carrying union types and maximise the return on paper for everyone

[ianood] 01/4/2021 18:15

Moorsie2 - Thank you for the "heads-up"

[moorsie2] 01/4/2021 13:29

This unprecedented dynamic is not fully priced in yet -

Value to be had in shares in this sector

[moorsie2] 01/4/2021 13:28

BRUSSELS, April 1, 2021 (PPI Europe) - Brown kraftliner set for further gains: Demand for brown kraftliner remained strong in March across Europe and the supply/demand situation deteriorated further in southern markets more exposed to US supplies, sources said. Prices held steady in Germany and France, with an expected Euro 50/tonne hike to come in April. Brown kraftliner imported from the US remained scarce, with prices rising for the sixth straight month in March, up an average of Euro 25/tonne, sources said. Europeans also hiked their prices by Euro 20-25/tonne in March, reaching a total increase of Euro 85-90/tonne in Italy and Euro 95-100/tonne in Spain since Q4 last year. Another Euro 50/tonne hike is slated for April and many sources expect it to go through in one go.
RCCM prices jump: The recycled containerboard (RCCM) market did not show any signs of slowing in March, with reports of strong demand but slightly more stable supply across Europe, sources said. As RCCM suppliers tried to catch up on soaring paper for recycling costs, prices rose by Euro 30/tonne in Germany and Euro 20/tonne in France, amounting to cumulative hikes of Euro 140/tonne and Euro 150/tonne, respectively, since Q4. A further Euro 50/tonne increase is slated for April. In the UK, prices rose by £50/tonne in February/March and another £50/tonne hike is expected in April. In Spain, testliner prices rose by Euro 50/tonne as of mid-March, while they grew by Euro 20-30/tonne in Italy, reaching a total increase of Euro 160/tonne and 90-110/tonne, respectively, since Q4. White-top testliner prices went up by a total of Euro 50/tonne over February and March in Germany and France, and by Euro 25-30/tonne in Italy and Spain over the same period.

[moorsie2] 31/3/2021 13:37

I am with you - they should be clearer for staff

[buyzantium] 31/3/2021 12:40

Thank you Moorsie - The bored would perhaps prefer a more apposite response.

[moorsie2] 31/3/2021 11:25

The Board views it completely opposite.

If there was anything to it they would have updated the market. They do not engage in refuting newspaper stories

[buyzantium] 31/3/2021 10:34

Over a month now since the Mondi/DS Smith rumour started by Bloomberg sources. If there was nothing to it I would have expected a statement for the benefit of employees and loyal long term investors who remain unsettled by this news.

[fhmktg] 29/3/2021 11:29

Black Creek aboard for nearly 4%......welcome!

[1nf3rn0] 17/3/2021 11:26

(Sharecast News) - Berenberg upgraded DS Smith to 'buy' and initiated coverage of Smurfit Kappa with the same rating in an upbeat note on prospects for the paper and packaging sector.Analyst Eoghan Reid said the industry had been seen as a cyclical commodity play with the paper price dictating profitability but that it was now becoming a higher quality sector with consistent, growing returns.Reid upped his rating on DS Smith from 'hold' and increased his target price to 475p from 290p. He started coverage of Smurfit Kappa with a 'buy' recommendation and a target price of €47.50 and initiated Mondi with a 'hold' rating and a £17.90 target price.Prices are likely to rise after the pandemic based on strong demand for corrugated packaging, rising export demand, more normal raw material costs and unwinding Covid-19 costs, Reid said. DS Smith is the best way to buy into improving prices, he added.More online sales and a move away from plastic packaging for environmental reasons will also support long-term demand, Reid said. As the biggest, most innovative companies, DS Smith and Smurfit Kappa are best placed to benefit, he said.Improving returns and cash generation will also support the sector with high rates of investment return and consistent dividends, Reid said. Mondi and Smurfit Kappa have the best record and Smurfit's €1.3bn investment plan makes it the most attractive company on this basis."The sector ... is transitioning into a higher-quality industry with consistent, growing returns and exciting structural drivers," Reid wrote in a note to clients. "The market looks set to consolidate further, returns have proven resilient though the cycle and the sector's importance to the circular economy and e-commerce megatrends is increasingly appreciated."Smurfit Kappa is the most consistent compounder in the sector but DS Smith is at an inflection point as a value name exposed to a cyclical recovery, Reid said. Mondi is the highest quality operator but its valuation is in line with peers and it has the lowest growth and the biggest exposure to plastic packaging.

[nightspot] 12/3/2021 15:29

From the 3 march update:

'...rising input costs, together with high demand, continued to drive higher paper prices.'

"We have started to recover these additional costs through higher packaging prices and our expectation is, with the customary lag, they will be fully recovered and underpin continued momentum into the 2022 financial year," the company said.

2022 should be a very good year

[moorsie2] 11/3/2021 14:49

Yes and no.

It is important. But not the key question. For even if it is zero margin gain it is less important than when and by how much you have increased box prices by. That is the billion dollar question

[nightspot] 11/3/2021 14:19

I guess this is the pivotal question:

'Issue of how much is input cost recovery and how much margin gain due to supply demand balance is unknown'

[moorsie2] 11/3/2021 13:08

The issue is two fold.

1. Sale of paper - this is more commodity driven and such announcers are common though two large increases in such proximity is rare. Issue of how much is input cost recovery and how much margin gain due to supply demand balance is unknown

2. Is the recovery of paper costs in box prices. These usually lag by average 6 months or longer.
With 100 per tonne increase this alone would be approximately 12% box price increase on a pure basis. Add to that lag from previous price increases then most box accounts are loss making thus an immediate and large increase in boxes is needed or better to force majure any contract

[nightspot] 11/3/2021 12:28

Thanks for that info Moorsie.

Does that mean their existing sales contracts are on possibly loss making rates, and how long will it take for these to run their course? Would they have had a hedging mechanism in place?

I fail to see why the industry has demonstrated so little pricing power (until now), and why they don't operate more flexible pricing, seeing as their input costs vary so much.

[moorsie2] 11/3/2021 12:10

LONDON, 11 March 2021 (Press Release) - Following our price increase for brown RCCM grades in February, raw material costs have continued to increase at an unprecedented rate across Europe, driven by Covid-19 related lockdowns. Due to the significant increase in our input costs and the continued strong demand for RCCM products, DS Smith Paper is announcing a further price increase of €50 per ton for all RCCM grades for all new orders placed from the date of this announcement. This announcement applies across Europe.

Hot on the heels of this one

LONDON, 18 February 2021 (Press Release) - Due to increased input costs and continuing strong demand, DS Smith Paper is announcing a price increase of €50/T for its brown RCCM grades for all new orders placed from the date of this announcement. This announcement applies across Europe.


100 euros a tonne in 6 weeks is quite unprecedented..

[moorsie2] 03/3/2021 16:21

Haha good man

I looked and see you do not post on any other company and just joined last summer.

Also the only new facts in the public domain is this mornings statement which contains no facts. So what facts are you referring to?

[fairtrader66] 03/3/2021 13:58

Hi Moorsie,

My points are backed up by facts in the public domain.

I use more indicators than just ROCE (which is obviously still important). I suppose we will have to wait to see the full impact of the significant re-engineering which occurred JUST BEFORE covid hit.

I'm going back to focussing on my other undervalued stocks now and will check in around 12 months from now.

Don't sell the best silver whilst I'm gone!

[moorsie2] 03/3/2021 07:56

Cw2000 I completely agree.

A statement that says nothing. I am disappointed that earnings guidance is not lifted higher. This is a once in 20 years sweet spot for the industry.

But then their 'really clever strategy of not being fully vertically integrated and remaining deliberately short on paper is biting them on the bum badly.

I hope the new Chairman is watching closely and listening to the broad spectrum of analysts and industry knowledgeable people outside his company...

[moorsie2] 02/3/2021 20:17

Ianood - I really hope meaniful engagement is taking place for the reasons outline above..

[moorsie2] 02/3/2021 20:15

Fairtrader66

Your two summary points are not backed up by fact in the public domain

1. What have they done that makes them the innovative sustainable guys versus the competition? I cannot see anything of significance
2. You say the share price can only go up , that is demonstrably not true. If they show their roce is significantly behind the competition then our valuation falls

I hold this share and want the best return possible. My point is I cannot see how present management is going to deliver that value and thus look to m&a synergy and market scale. You have stated that management is excellent in your posts. This is the seminal point I challenge. They are not exceptional, they have made poor investment calls that had diminished roce and ifthe ceo is there by June then my holdings are being sold