Group 1 - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] - Fast-moving trending stocks can be risky if their valuations exceed future growth potential, leading to potential losses for investors [2] - Investing in bargain stocks with recent price momentum may be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2 - Rayonier Advanced Materials (RYAM) has shown a price increase of 11.5% over the past four weeks, indicating growing investor interest [4] - RYAM has gained 16.2% over the past 12 weeks and has a beta of 3.01, suggesting it moves significantly more than the market [5] - RYAM holds a Momentum Score of B, indicating a favorable time to invest based on momentum [6] Group 3 - RYAM has a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investors and drive prices higher [7] - The stock is trading at a Price-to-Sales ratio of 0.36, suggesting it is undervalued, as investors pay only 36 cents for each dollar of sales [7] - RYAM is positioned for further growth, supported by its momentum characteristics and reasonable valuation [8]

Core Viewpoint - Rayonier Advanced Materials (RYAM) is identified as a strong value stock, currently holding a Zacks Rank of 1 (Strong Buy) and an A for Value, indicating its potential for undervaluation in the market [3][7]. Valuation Metrics - RYAM has a Price-to-Book (P/B) ratio of 0.86, significantly lower than the industry average of 2.54, suggesting it is undervalued compared to its peers [4]. - The Price-to-Sales (P/S) ratio for RYAM stands at 0.38, compared to the industry average of 0.85, further indicating its potential undervaluation [5]. - RYAM's Price-to-Cash Flow (P/CF) ratio is 10.66, which is lower than the industry average of 13.74, reinforcing the notion that RYAM may be undervalued based on its cash flow outlook [6]. Investment Outlook - The combination of RYAM's favorable valuation metrics and strong earnings outlook positions it as an attractive investment opportunity for value investors [7].

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Fast-moving trending stocks can be difficult to enter at the right time, as they may lose momentum if future growth does not justify their high valuations [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: Rayonier Advanced Materials (RYAM) Analysis - Rayonier Advanced Materials (RYAM) has shown a four-week price change of 11.3%, indicating growing investor interest [4] - Over the past 12 weeks, RYAM's stock has gained 33.2%, with a beta of 3.01, suggesting it moves 201% higher than the market [5] - RYAM has a Momentum Score of A, indicating a favorable time to invest based on momentum [6] Group 3: Earnings and Valuation - RYAM has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investors [7] - The stock is currently trading at a Price-to-Sales ratio of 0.40, suggesting it is undervalued, as investors pay only 40 cents for each dollar of sales [7] Group 4: Additional Opportunities - Besides RYAM, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - The Zacks Premium Screens offer over 45 strategies tailored to help investors find winning stock picks [9]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2024 reached $51 million, a $27 million or 113% increase year-over-year, with margins nearly doubling to 12.7% [7] - Year-to-date adjusted free cash flow stands at $99 million, indicating strong cash generation capabilities [7] - Net debt decreased by $90 million from the same period in 2023, ending the quarter at $653 million, with net secured leverage at 2.8 times [18] Business Segment Data and Key Metrics Changes - High Purity Cellulose (HPC) segment saw EBITDA rise by $32 million or 119%, driven by higher specialty prices and volumes [8] - Paperboard segment experienced a $6 million EBITDA decline due to reduced sales prices and increased pulp costs [8] - High-Yield Pulp segment improved by $6 million in EBITDA, attributed to higher prices and productivity, despite a decrease in sales volumes [8][16] Market Data and Key Metrics Changes - HPC segment sales increased by $33 million or 11% to $325 million, with pricing up 13% [14] - Paperboard sales decreased by $2 million, driven by lower demand, with EBITDA margins reducing to 20% [15] - High-Yield Pulp sales increased by $3 million, with a 14% rise in sales prices, although sales volumes declined by 3% [16] Company Strategy and Development Direction - The company aims to optimize its balance sheet and explore the sale of non-core businesses while focusing on enhancing the earnings power of its core HPC business [28] - A key initiative includes reducing commodity exposure, with non-fluff commodity revenue dropping to 4% in Q3 2024 from 14% the previous year [30] - The company is advancing its biomaterials strategy, with the Fernandina bioethanol plant project expected to commence operations in late 2026 [31] Management's Comments on Operating Environment and Future Outlook - Management reiterated adjusted EBITDA guidance for the year at $205 million to $215 million, despite a $10 million impact from a fire incident [33] - The company expects cash interest expense for 2024 to be approximately $93 million, with a projected annual cash expense of just over $80 million post-refinancing [34] - Management anticipates lower overall costs in 2024, driven by reduced key input and logistics expenses, although some costs will rise due to maintenance and recovery efforts from the fire [40] Other Important Information - The company successfully refinanced its debt, raising $700 million in secured term loan financing, enhancing financial flexibility [19] - Corporate expenses increased by $5 million due to unfavorable foreign exchange rates and higher variable compensation [9] - The company received a $15 million IRS tax refund and $39 million from the sale of lumber duty rights, which will be partially offset by the impact of the Temiscaming HPC plant suspension [36] Q&A Session Summary Question: Exposure to China and European Construction Demand - Management noted that approximately 20% of total enterprise sales are exposed to China, primarily in acetate and some commodities [48] - Acetate demand remains stable, while the company is reducing exposure to viscose [50] - There is a modest uptick in ethers demand in Europe, attributed to restocking and underlying demand improvements [54] Question: Demand Environment for Acetates and CS - Acetate is expected to remain stable, while other cellulose specialties may see improved demand due to competitor shutdowns [58] - The company is working on price increases for cellulose specialties, but specifics on implementation are still early [60] Question: Spending on Jesup Repairs - Management indicated it is too early to estimate repair costs for the Jesup facility, as investigations are ongoing [63] Question: Temiscaming Plant Closure Impact - The benefit from bridge sales during the Temiscaming plant shutdown has diminished, but some uplift is expected in Q4 [66] Question: Growth in Biomaterials - The biomaterials strategy is central to the company's ESG objectives, leveraging existing resources to produce renewable products [70]

Third Quarter 2024 Financial Presentation Materials November 6, 2024 Safe Harbor Forward-Looking Statements Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to RYAM's future events, developments, or financial or operational performance or results, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform A ...

Company Performance - Rayonier Advanced Materials reported a quarterly loss of $0.12 per share, better than the Zacks Consensus Estimate of a loss of $0.18, and an improvement from a loss of $0.41 per share a year ago, representing an earnings surprise of 33.33% [1] - The company posted revenues of $401 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 2.72%, but showing an increase from year-ago revenues of $369 million [2] - Over the last four quarters, Rayonier Advanced Materials has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Performance - Rayonier Advanced Materials shares have increased approximately 100.7% since the beginning of the year, significantly outperforming the S&P 500's gain of 19.8% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.47 on revenues of $430.7 million, and -$0.48 on revenues of $1.65 billion for the current fiscal year [7] Industry Outlook - The Paper and Related Products industry, to which Rayonier Advanced Materials belongs, is currently ranked in the bottom 16% of over 250 Zacks industries, indicating a challenging environment [8] - The outlook for the industry can materially impact the stock's performance, as research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

Financial Performance - Net sales for Q3 2024 were $401 million, an increase of $32 million or 8.7% from the prior year quarter[1]. - Adjusted EBITDA from continuing operations for Q3 2024 was $51 million, up $27 million or 112% from the prior year quarter[1]. - The company reported a net loss of $33 million, or $(0.49) per diluted share, compared to a net loss of $25 million, or $(0.39) per diluted share, in the prior year quarter[5]. - The company reported a net loss of $33 million for the nine months ended September 28, 2024, compared to a net loss of $40 million for the same period in 2023[60]. - Adjusted EBITDA for the nine months ended September 28, 2024, was $175 million, up from $171 million for the same period last year[68]. - Adjusted income (loss) from continuing operations for the three months ended September 28, 2024, was $(0.12) per diluted share, compared to $(0.40) per diluted share for the same period in 2023[76]. - Adjusted income (loss) from continuing operations for the nine months ended September 28, 2024, was $(0.58) per diluted share[76]. - The company experienced a total adjusted loss of $(39) million for the nine months ended September 28, 2024[76]. Debt and Financing - Total debt stood at $773 million, with a net secured debt of $622 million and a covenant net secured leverage ratio of 2.8 times[1]. - The company successfully raised $700 million in secured term loan financing to refinance its capital structure[1]. - Non-operating interest expense increased by $10 million for the nine months ended September 28, 2024, due to a rise in the average effective interest rate on debt[19]. - The Company has secured commitments for a five-year $175 million ABL credit facility, initially priced at Term SOFR plus a spread of 2%[30]. - Total debt as of September 28, 2024, was $773 million, a slight decrease from $777 million as of December 31, 2023[75]. - Adjusted net debt decreased to $653 million as of September 28, 2024, from $721 million at the end of 2023, reflecting improved financial health[75]. Cash Flow and Liquidity - The company generated $99 million of Adjusted Free Cash Flow, which supported a $37 million reduction in net secured debt during the quarter[2]. - Cash provided by operating activities for the nine months ended September 28, 2024, was $149 million, compared to $82 million for the same period last year, indicating an increase of 81.7%[71]. - The Company generated operating cash flows of $149 million during the nine months ended September 28, 2024, driven by proceeds of $39 million from the sale of softwood lumber duty refund rights[27]. - The Company ended the third quarter with $281 million of global liquidity, including $136 million of cash and $135 million of borrowing capacity under the ABL Credit Facility[31]. - Adjusted Free Cash Flow guidance for 2024 has been increased to $115 million to $125 million[1]. - The company expects annual adjusted free cash flow guidance for 2024 to be between $115 million and $125 million[72]. Sales and Pricing - Price increases of up to 10% for cellulose specialties products were announced, expected to improve margins in 2025[4]. - Average sales price for High Purity Cellulose was $1,369 per metric ton for the three months ended September 28, 2024, compared to $1,215 for the same period last year, reflecting a 12.7% increase[62]. - Sales volume of High Purity Cellulose was 218,000 metric tons for the three months ended September 28, 2024, a slight decrease from 225,000 metric tons in the previous quarter[62]. - The average sales price for Paperboard was $1,400 per metric ton for the three months ended September 28, 2024, down from $1,459 in the same period last year, representing a decrease of 4.0%[62]. - High-Yield Pulp external sales price averaged $559 per metric ton for the three months ended September 28, 2024, compared to $489 for the same period last year, marking a 14.3% increase[62]. Operational Challenges - The Company incurred a $14 million one-time operating charge related to the indefinite suspension of operations at its Temiscaming HPC plant[33]. - The Company anticipates a decline in EBITDA from the Paperboard segment in the coming quarters due to market pressure from new competitive supply[38]. - High-Yield Pulp prices are expected to decline in the fourth quarter, while sales volumes are projected to increase significantly due to timing of shipments[39]. - The company incurred asset impairment charges of $25 million during the nine months ended September 28, 2024[60]. - Asset impairment charges amounted to $0.38 million for the three months ended September 28, 2024[76]. - Indefinite suspension charges were $0.12 million for the three months ended September 28, 2024, compared to $0.10 million for the previous quarter[76]. Future Outlook - 2024 Adjusted EBITDA guidance is reiterated at $205 million to $215 million, despite an estimated $10 million impact from a fire at the Jesup plant[3]. - The bioethanol facility in Tartas, France is expected to deliver approximately $3 million to $4 million of EBITDA in 2024, growing to $8 million to $10 million beginning in 2025[36]. - The company may require additional financing in the future to meet capital needs or make acquisitions, which may not be available on favorable terms[51]. - The company is exploring the potential sale of its Paperboard and High-Yield Pulp assets located at its Temiscaming site[32].

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks. Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being unde ...

Rayonier Advanced Materials Inc. (NYSE:RYAM) Q2 2024 Earnings Conference Call August 7, 2024 9:00 AM ET Company Participants Mickey Walsh - Treasurer and VP, IR De Lyle Bloomquist - President and CEO Marcus Moeltner - CFO and SVP, Finance Conference Call Participants Matthew McKellar - RBC Capital Markets Daniel Harriman - Sidoti Dmitry Silversteyn - Water Tower Research Sandy Burns - Stifel Mickey Walsh Welcome again to RYAM's Second Quarter 2024 Earnings Conference Call and Webcast. Joining me on today's ...

Rayonier Advanced Materials (RYAM) came out with quarterly earnings of $0.19 per share, beating the Zacks Consensus Estimate of a loss of $0.07 per share. This compares to loss of $0.25 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 371.43%. A quarter ago, it was expected that this maker of cellulose products would post a loss of $0.01 per share when it actually produced a loss of $0.02, delivering a surprise of -100%. Over ...