Domtar Corp. (USA) (NYSE:UFS)

CAPS Rating: 4 out of 5

The Company manufactures and sells fine paper, including uncoated free sheet and coated groundwood.

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Player Avatar TMFBlacknGold (99.02) Submitted: 11/30/2012 2:36:46 PM : Outperform Start Price: $70.16 UFS Score: -1.03

Here's a snip from my recent post:

"NCC should be on your radar (with loud sirens that are triggered every time you read about it). Few materials have the disruptive power of NCC - whose impact could alter daily life as we know it. Made from (simplification) purified wood pulp, the material can be made into products ranging from viscous gel (safe fracking fluid) to micro-electronics to optical coatings to tooth fillings.

NCC is almost 8 times as strong as stainless steel, 3.5 times as strong as Kevlar, and nearly as flexible as pure cotton fibers. Meanwhile, several pioneering polymerization techniques with cellulose are beginning to challenge the strength and flexibility of carbon nanotubes. Can it get any better? Well, yes. NCC is also made from renewable and environmentally-friendly wood pulp, which translates into one of the first super materials with virtually negligent toxicity."

Read the full write-up here that features Domtar's JV CelluForce, which is tackling NCC scale-up head on:

http://beta.fool.com/blackngold/2012/11/29/future-contains-lots-pulp/17486/

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Member Avatar nonzerosum (91.76) Submitted: 12/2/2012 9:05:09 PM
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You have nice picks and blogs. UFS is such a big company it will take years for a new technology to meaningfully impact earnings. Regardless, it seems pretty reasonably priced if you look at CFFO and their strong balance sheet. I just wish they would convert more of their debt into these 4.4% notes. More companies should be using tax deductible debt for buybacks to take advantage of the spread between the low interest at which they can issue debt and their high FCF yield . I'm going to buy some. tj.

Member Avatar TMFBlacknGold (99.02) Submitted: 12/3/2012 1:21:35 PM
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Thanks for your comment!

At the time of my rather lucky and well-timed pick, UFS was trading at a pretty big discount to book value. You're right that NCC won't matter anytime soon - certainly not soon enough to defend a current investment. Great insight on their debt notes!

Btw, Non-Zero is a great book if that's what your name refers to. One of my favorites.

Member Avatar nonzerosum (91.76) Submitted: 12/3/2012 5:21:47 PM
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Yes, the name is taken from the book. It really resonated with me on many levels. tj.

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