Supremex Inc T.SXP

why share price is stock

[microcaphobby]

The company benefitted from a 24% price increase in envelopes . However the volume of envelopes sold decreased and that is the trend. It is innevitable that envelope use is declining. Unless the company can move away from its depedance on envelopes, the share price will continue to decline. Those who sold at the peak prcie shold feel very fortunatel. Those who still have a profit  should consider selling their shares. 
Unless the compnay can continue  to pass on price increases of enevelopes, I don't see a great future for the company. Enevelopes are made all over the world and what is to stop Staples,  etc from importing  them from countries  that have a much lower cost of production.

[HermannHaller]

The decline in envelope volumes is nothing new, the company has been managing this for years. They have grown market share in the US, improved margins, and made acquisitions in packaging. The stock is only trading at 5x PE, so in my view it is already reflecting an overly pessimistic outlook. I expect a rebound in the stock when they report Q1.

[Undeniable]

The company is moving into packaging more and more.They know envelope sales is decreasing. 

[Torontojay]

The have a dominant market position and significant pricing power in envelopes. 

[smartamateur]

and fyi: external competition is not that easy. envelopes have a shelf life of 6 months and less. Importing from outside the country is not that economical.  Also, envelopes are not as easy to fabricate as some may think. Each customers have specific preferences and customizations too. Add on this flexibility to adjust production and ship it in a matter of hours (instead of days). For

[smartamateur]

main customers of supremex are not companies like Staples, those are companies like banks, insurance, credit card, mass mailing enterprises, cable companies, etc, with envelopes GEARED for high volume mechanical insertion and mailing.

[bucheroncapital]

The you should sell you're shares ! The company is diversified into the specialty packaging and POS kits for retail.  Agreed the classic enveloppe market is at best stagnant in Canada.  But south of the border it's more dynamic and fragmented.  I hold SXP for the balance sheet , the execution and the long term story it's a mini CCL and it's turning to new buiness