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Supremex Inc T.SXP

Alternate Symbol(s):  SUMXF

Supremex Inc. is a Canada-based company, which manufactures and markets envelopes and provides paper-based packaging solutions designed to the specifications of national and multinational corporations, direct mailers, resellers, government entities, small-medium enterprises (SMEs) and solutions providers. The Company operates in two reporting segments: the manufacturing and sale of envelopes and the manufacturing and sale of paper-based packaging solutions and specialty products. It also manufactures and distributes a diverse range of packaging and specialty products, including folding carton packaging and e-Commerce fulfillment packaging solutions. Other packaging and specialty products include the Conformer Products, labels, record sleeves and jackets, polyethylene bags for courier applications, bubble mailers and Enviro-logiX. It operates over ten manufacturing facilities across four provinces in Canada and five manufacturing facilities in three states in the United States.


TSX:SXP - Post by User

Comment by mrmoribundon Feb 20, 2023 8:14pm
156 Views
Post# 35295483

RE:Supremex Q4

RE:Supremex Q4 They may or may not beat 37 cents but that's not the key issue. Paper, envelopes, boxes, these are cyclical areas and pricing will not favour the seller forever. Don't assume that the sellers of those two companies (recently bought by Supremex) were stupid. They probably saw the cycle turning against them. And that's why they sold for what may look to be (on the surface) very reasonable prices.

That said, the people at Supremex aren't stupid either. While they know perfectly well that this is not going to be a 30% ROE story forever, they were likely looking beyond short-term pricing weakening that must surely be coming.

I think I recall that in the Q3 CC the CEO used the word "sticky" quite a bit. And that's the key thing. More important than 37 cents (or not). They've been working hard to build long-term "sticky" seller-buyer relationships that will stay profitable even during a pricing downturn.

Don't anybody delude yourself into thinking this will stay 30% ROE indefinitely. That would be like thinking the law of gravity can be overturned. But if it can ultimately come to look like a reliable, say, 14% ROE long-term story then the current $7-8 range is probably entirely reasonable.
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