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Deep Vertical Integration Makes Orchids Paper Products Company (AMEX: TIS) Stock Resilient

We cannot do without paper towels, napkins, and bathroom tissues. This is one of the most stable parts of the entire Paper & Paper Products Industry. This company’s own brand is relatively low-key, but it is also a popular private label supplier. The company has a durable economic moat because it makes tissue rolls in bulk. Demand is strongly protected because the company has courted a large share of the discount retail store market segment. The company focuses on a radius of less than 100 miles from its base in Pryor, OK, which keeps its operational expenses very productive.

The company recently signed a five-year agreement for waste paper raw material supplies. This meets Green Business aims, while securing the company’s margins and market share as well. The company generates value for the stock by providing quality and economy for an essential product category. It also demonstrates the business power of sharp domain and territorial focus.

The Price to Earnings Ratio on a Trailing Twelve Months basis is less than 19. Earnings per Share during this period have tripled over the same period one year ago. The company has grown about 40% faster than the rest of the Paper & Paper Products Industry in terms of sales. The board of directors has approved a capital project, and also approved a new credit line to automate production. This will save on labor and improve cost-competitiveness.

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