Smurfit Kappa Share Discussion Threads

[essentialinvestor] 12/11/2018 13:33

The broker also mentions the bid premium SKG trades on,
is there much bid premium left??.

[soundbuy] 12/11/2018 12:13

Can't access anymore but apparently Kepler on Smurfit here




Guessing Kepler sticking the knife in??

(Thought it was Goldman still doing the damage.....zzzzzzzzzz)

[essentialinvestor] 12/11/2018 11:52

I'm only 23% invested as of this morning, so to say market
weakness would suit me, is something of an understatement!.
Not comfortable at all being that much in cash.

[soundbuy] 12/11/2018 11:46

Watching......quite relentless........

If I wasn't reluctant to commit more money to the mkts at present I'd have pushed the buy button towards the end of last week.......

[essentialinvestor] 12/11/2018 11:26

The bid premium has pretty much been blown away.

Heading for £22 or below?.

[essentialinvestor] 09/11/2018 14:35

Very nicely done!!. Lower would suit me tbh.

[soundbuy] 09/11/2018 14:15

Sold out at £31/£32 having held since the London Listing.........looking to re-enter at some point.....

Looking at the chart above you'd hope it holds around here....next support around £22...

[essentialinvestor] 09/11/2018 14:06

They may be taken out before the next cycle downturn hits,
however that's not a reason to buy imv. Longer term looks a
good place to have a small amount invested. Just my own take.

[soundbuy] 09/11/2018 13:47

'Goldman warns of weak containerboard prices as excess US supply hits Europe'

[soundbuy] 09/11/2018 13:43

Goldman doing the damage again..........zzzzzzzzz

[essentialinvestor] 02/11/2018 12:21

You could make a small fortune trading this if you can read the direction,
4% daily moves are not unusual.

It's one to add following a few bad days for me.

[moorsie2] 02/11/2018 10:14

As ecommerce grows, Smurfit Kappa’s boxes are delivering the goods. So too — assisted by shifts in the recycling industry — are the Irish company’s bosses. Europe’s biggest cardboard packaging maker has reported a 7 per cent jump in third-quarter underlying revenue. Muscular operational gearing meant pre-exceptional ebitda rose 27 per cent to €1.13bn.

Just as well. Some investors were angered this summer when Smurfit dismissed a bid from International Paper. Given the recent dip in the US group’s share price, the offer would be worth about €36 per share right now. That is still a 20 per cent premium to Smurfit’s Dublin-listed stock.

The board was right to send IP packing. Three important factors are working in favour of an independent Smurfit. First, ecommerce packaging may make up only about 10 per cent of its sales, but the segment is growing by about the same amount each year.

Second is sustainability. Smurfit makes hardly any of the plastic containers whose debris choke the oceans. The UK government’s vow this week to introduce a plastic tax exemplifies the trend towards paper-based recyclables.

Third, China’s decision to stop processing much of the world’s waste has trimmed the cost of cardboard for recycling. Those lower input prices helped Smurfit bolster ebitda margins by 290 basis points to 16.9 per cent.

Smurfit’s cautious approach to expansion in a globally fragmented sector is commendable. The latest bolt-on acquisition, the €133m purchase of a Serbian packaging business, combines local contacts with Smurfit’s heft. A big global footprint can mean dipping your toes into choppy waters, however. Caracas has seized ;Smurfit’s Venezuela operation, triggering a €66m writedown.

Smurfit’s margins nudged higher in the US, but there are fears that overcapacity there may hit Europe by 2020. Such snags are more than amply reflected in a 30 per cent share price discount to a global basket of peers. That’s a gap too big to be filled with bubble wrap.

Lex recommends the FT’s Due Diligence newsletter, a curated briefing on the world of mergers and acquisitions. Sign up at ft.com/newsletters

[essentialinvestor] 01/11/2018 14:31

Had another small amount on that dip.

[essentialinvestor] 31/10/2018 12:02

Had a very small amount @2608.

In fairness I think this may be hammered again if markets turn lower.
Not the time to be brave here imv.

[ygor705] 31/10/2018 08:26

Very strong trading update this morning which should put a brake on share price deterioration....at the very least!

[moorsie2] 26/10/2018 09:48

and no....

Guess we will have to wait to their q3 results.

BTW - IP shares jumped over 10% on their Q3 results by the end of yesterday

[moorsie2] 25/10/2018 14:34

I am expecting a strong rise here today and tomorrow.

IP share are bouncing up by 5% plus based on strong 3rd qtr earnings

[ygor705] 20/10/2018 09:39

Am surprised by the fall here. The Venezuelan closure plus a Chinese company upping its sector investment in the US hardly seems sufficient reason to me. Have I not read somewhere that the US authorities are giving the Chinese a hard time for undercutting US industry? I also hear that the Smurfit family have sold the K Club but have no intention of giving up their interest in SKI.

[essentialinvestor] 10/10/2018 15:35

Thanks.

I suppose we know too well the sector is uber cyclical, and the rating
reflects that.

[catcheymonkey] 10/10/2018 15:33

>> can anyone provide any detail on this development?



==================
Packaging makers including Smurfit Kappa, Mondi and DS Smith slumped for a second day on worries that a glut of containerboard would drive prices sharply lower. The retreat follows an announcement on Monday from Nine Dragons, the largest Chinese containerboard producer, that it would acquire a paper mill in Wisconsin.

Goldman Sachs downgraded US-listed International Paper from “buy” to “neutral” as it cut target prices across the sector. The broker said it had “underestimated the speed and severity” of containerboard supply coming on to the market in response to the ecommerce boom, and was “incrementally concerned by the pace of recent new supply announcements as well as the fact that Chinese entrants are now entering the US market for the first time”.
==================

[essentialinvestor] 10/10/2018 13:46

New Chinese entrants is an interesting comment,
can anyone provide any detail on this development?.

[soundbuy] 10/10/2018 11:32

Hmmm............Goldman (H/T FT AV)

Our IP upgrade and addition of WRK to the CL last year was based on
our thesis that US box shipment growth can sustain higher rates (2%+) going forward than it has in the past (0.5%-1.0%) since eCommerce is now a large and growing portion of the mix. While we consider this thesis still valid (box demand rose 2.4% in 2017 and 1.8% YTD), we underestimated the speed and severity of the supply response in the industry to this acceleration in demand. Following 12 new capacity announcements since our upgrade, we now forecast 11% growth in North American capacity from 2019-2022 (including 0.5%/year capacity creep) against our estimate of 2% per year demand growth. We acknowledge that valuation on containerboard stocks likely already reflects these announcements following significant YTD underperformance, but we are incrementally concerned by the pace of recent new supply announcements as well as the fact that Chinese entrants are now entering the US market for the first time. Furthermore, barring a sharper re-acceleration in demand growth, we struggle to identify positive catalysts for our broad containerboard coverage until the overhang of new capacity abates. That said, we expect the pending KS acquisition to act as an idiosyncratic positive catalyst for WRK leading us to maintain our Buy rating.

..........................
.........................

... over the past 15 months we have had 12 new capacity projects announced
with another 7 companies reported to be exploring further new capacity additions. Individually, each of these projects is relatively small (~1% of existing North American capacity), but in aggregate they are likely to result in oversupply at some point in the 2020-2022 time period even if demand growth remains at recent ~2% rates. We acknowledge that we were not prepared for nor did we expect such a rapid industry response to better demand prospects, and this has been a key reason for the underperfromance of containerboard stocks over the past year.


And Citi.......

This month alone we’ve seen other announcements from McKinley Paper, which confirmed plans to move forward with its Port Angeles, WA project, as well as New-Indy acquisition of Resolute’s Catawba, SC mill for another containerboard conversion. While the amount of capacity Nine Dragons, New-Indy & McKinley will add is uncertain, we estimate 2020 operating rates could get pushed towards ~90-92% given the announcements. The key question into year-end is how many additional capacity projects we learn of (we expect UFS & potentially PKG to announce capacity plans) and the strength of box demand into 4Q & the crucial E-commerce season.

[soundbuy] 10/10/2018 10:16

With current mkt woes, SKG around £24 and SMDS £3.80 ish would be levels I'd start to build positions.....around a SKG/SMDS split of 80/20

[soundbuy] 10/10/2018 10:12

Not too sure time to re-enter but interest piqued with recent sell off.....tight supply over the past couple of yrs will not result price easing even going fwd IMO......despite Nine Dragons et al.....falls across the pond merely being reflected here......rather brutal ..... SMDS more exposed I'd say but both looking attractive on an income front too.....the proviso being there's no recession around the corner....

[moorsie2] 05/10/2018 08:58

US industry markdowns on Tue and Wed are affecting European companies for no reason and thus big corrections yesterday