RE:RE:RE:Technicals say buy it while you canBSdetector2016 wrote: Thanks for your comments.
The sentiment is definitely negative towards printing but I don't think it's entirely justified. Where I live everyone gets a flyer bag stuffed in their mailbox every couple of weeks or so. With the Covid overhang dissipating many businesses are looking to sell more and I'm seeing it in traditional print media.
Packaging is like consumer staples; inflation is passsed on to the consumer. Longer term it won't matter if input materials have gone up in price as TCL will pass on those costs just like anyone else in the same sector.
Defiance2050 wrote: Im long but took out half my position near 52 week high. I might consider adding if SP drops more.
Market has horrible sentiment towards printing (normalized around 50% of revenue).
Only thing I can caution you about is the price of raw materials. plastic and resin price have been increasing and short term margin issues have arisen in packaging. TCL is down 20% and packaging is down 10% as a sector since August. Once commodity prices stabilize or reduce margins will improve due to indexed prices (market doesnt seem to grasp it).
Its been a medium term problem since 2019 guess TCL is just associated with newspaper (even though they have closed some and sold some facilities for more than book cost and have moved equipment else where). Packaging has a much higher EV/EBITDA value and may not be fully considered. TCL is also under-covered with the big Toronto headquartered banks.
I agree about the defensive nature of packaging and there will be a price catchup due to cost-indexing.