Perils
Assuming a reasonably competent management team, the actions "inside the fence" of most pulp and paper facilities are usually predictable. I am ignoring those management teams who make their numbers by ignoring maintenance--they are hard to detect, but will eventually be found out (and should be strung up with piano wire).
What I encourage you to watch and to watch how management teams handle is the outside perils. Last month we talked about the ransomware attack at WestRock, and I'll note as I write this, the CEO of WestRock is stepping down. Coincidence? I certainly don't know, but the timing is interesting, despite the press release explanations.
Then we have had recently the abnormally cold weather in the US South. Some companies were better prepared than others and came through this in a superior fashion.
Last year we had Covid-19.
What is next? Who knows, but it is most likely that perturbations in delivering consistent earnings will come from outside forces, not internal ones.
Want to pick winners? Pick companies whose management seems to best withstand the buffeting of outside forces no matter which way the wind blows.
