Rayonier Advanced Materials Inc. recently spun off out of Rayonier Inc. (NYSE:RYN). This special situation is presenting classic spinoff dynamics for value investors. RYN is a timber REIT tied largely to the U.S. housing market and overall economy. RYAM meanwhile is a high-value, pure-play specialty cellulose producer with leading margins, significant free cash flow, and high returns on capital. These are two very different businesses with very different investor bases. We believe that over time Mr. Market will realize RYAM's intrinsic value, unique position in the marketplace and the value per share will appreciate materially.
Follow the smart money
The market is currently presenting a compelling opportunity with RYAM. Databases still don't have the financial metrics or financial statements loaded yet, just check Yahoo finance. Clearly, Baupost alumnus and frequent spinoff investor David Abrams thinks this is a great opportunity having already accumulated more than 5% of shares outstanding. Another spinoff that performed very, very well for Mr. Abrams and his investors was Engility Holdings, Inc. (NYSE:EGL). Following him on EGL resulted in a gain of over 135%.
The bottom line is that RYAM is an industry leading, undervalued spinoff with capable and experienced managers at the helm.
More here:
http://seekingalpha.com/article/2495715-rayonier-advanced-materials-is-a-bargain-spinoff
