Supremex Inc T.SXP

5 year chart of SXP ..It was $4.50 in 2017

[hawkowl1]

What is the point of growing company if share price keeps going down!

Reducing share count...price goes down...

Supremex Inc T.SXP | Stock Quote & News | Stockhouse

[DudeRancher1953]

I've held SXP for several years and am underwater. Management made some poor decisions on the M&A side in the past IMO. Having said that, we have to be forward looking and the numbers tell me that things are improving so I actually added to my position recently as I think we could have good share price appreciation from here. This remains a risky investment with the ability of management

[Jambalaya54]

The share price reached $5.89 in September 2016 along with a very healthy dividend. Now after several consecutive quarterly beats and good profiability, cash flow and debt ratio, it can't get past it's February 2019 share price of $3.32 also with a dividend, although less than in 2016. This stock is continually being held down and management doesn't appear to want to make things more

[Capharnaum]

I disagree. Management has expanded its product line outside of envelopes, has bought back shares and made acquisitions that were accretive. On top of that, they have been able to get good results despite the pandemic. They have done pretty much everything in their control to raise the value of the stock.

[Jambalaya54]

"They have done pretty much everything in their control to raise the value of the stock."  If that's the case they have failed miserably at the current stock price. The stock price was considerably higher at $3.59 with a dividend as recently as March 21st, 2019 well before their recent succesive quarterly beats. And puhleeeeeeze don't say it was because of Covid

[Capharnaum]

I would argue that investors would have devalued the envelope market either way. Imo, the more recent strategy is the good one to build long term business value. For the business value to be higher, they probably should have cut the dividend 5 years ago to invest sooner into packaging, which would have supported a higher valuation today. If you compare the metrics from the Oct 2016 high ($4.46

[Jambalaya54]

"the market's appreciation will only keep going up from here." Ha, ha, ha, If I had a dollar for every time someone said the same thing about this chronic underperformer a dividend wouldn't be necessary. 

[Capharnaum]

Another way to look at this... In Oct 2016, Supremex EV was around 6x EBITDA which was almost 100% envelopes. In Aug 2021, Supremex EV is around 3x EBITDA with a mix of 70% envelopes and 30% packaging. If you apply an EV of 6x EBITDA to the packaging business, the EV left for the envelopes is worth just over 2.1x EBITDA. Unless you think valuation for the envelopes can go much further down from

[knicksman]

The company trades closer to 4x EV/EBITDA -- just as an FYI, IFRS 16 has improved the EBITDA numbers. But, otherwise, your comments are spot on. I agree with you, the market has derated the stock. I think its two reasons. 1. The structural decline in the envelope market has accelerated due to COVID. 2. And, the company acquired an envelope business in Feb 2020, levering up the B/S at the absolute