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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.

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Equity Bottom-Up

Rayonier Advanced Materials / Equity Bottom-Up

<div><div><div><div><ul style="list-style-type: disc;"><li><p>We are initiating coverage of Rayonier Advanced Materials, Inc. (RYAM), a leading supplier of wood- derived products and specialty materials, such as specialty cellulosics, paperboard, and high-yield pulp, to the industrial and consumer markets.</p></li><li><p>The company is currently focused on deleveraging the balance sheet and investing in the growth of higher-value biomaterial products, while improving operations and profitability of cash generative, but slower-growing, legacy operations.</p></li><li><p>FCF generation in a weak operating environment. With 2Q23 seeing downward pressure on commodity prices, as they retreat from the post-pandemic spike, and volumes, affected by customer destocking, management raised its free cash flow (FCF) generation goal to $55-70 million from $40-65 million in 2023 in order to accelerate debt paydown, toward the 2.5x net debt to EBITDA target level.</p></li></ul></div></div></div></div>

We are initiating coverage of Rayonier Advanced Materials, Inc. (RYAM), a leading supplier of wood- derived products and specialty materials, such as specialty cellulosics, paperboard, and high-yield pulp, to the industrial and consumer markets.The company is currently focused on deleveraging the balance sheet and investing in the growth of higher-value biomaterial products, while improving operations and profitability of cash generative, but slower-growing, legacy operations.FCF generation in a weak operating environment. With 2Q23 seeing downward pressure on commodity prices, as they retreat from the post-pandemic spike, and volumes, affected by customer destocking, management raised its free cash flow (FCF) generation goal to $55-70 million from $40-65 million in 2023 in order to accelerate debt paydown, toward the 2.5x net debt to EBITDA target level.

Rayonier Advanced Materials, Inc. - Mature Business Growing New Shoots