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Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

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Equity Bottom-Up

Rayonier Advanced Materials / Equity Bottom-Up

<ul><li>Light at the end of the tunnel? As RYAM prepares to release its 1Q24 results next Wednesday, it appears that fundamentals are improving across several of its markets, with pulp prices continuing to recover from mid-2023 lows and demand from construction markets stabilizing in the wake of customer inventory drawdowns that reduced RYAM’s opportunities to sell into the market in 2023.</li><li>1Q24 comps likely to struggle, but outlook may improve. Management’s guidance for 1Q24 issued at the 4Q23 report indicated flat Q/Q performance, with modest improvement in prices offset by lower operating rates and residual effects of an inventory correction at the customer level.</li><li>With 1Q23 being RYAM’s strongest quarter last year, revenue and profit may therefore continue to show negative Y/Y comps.</li></ul>

Light at the end of the tunnel? As RYAM prepares to release its 1Q24 results next Wednesday, it appears that fundamentals are improving across several of its markets, with pulp prices continuing to recover from mid-2023 lows and demand from construction markets stabilizing in the wake of customer inventory drawdowns that reduced RYAM’s opportunities to sell into the market in 2023.1Q24 comps likely to struggle, but outlook may improve. Management’s guidance for 1Q24 issued at the 4Q23 report indicated flat Q/Q performance, with modest improvement in prices offset by lower operating rates and residual effects of an inventory correction at the customer level.With 1Q23 being RYAM’s strongest quarter last year, revenue and profit may therefore continue to show negative Y/Y comps.

Rayonier Advanced Materials, Inc. - Market Fundamentals Improving, Albeit Slowly