Mercer International (MERC) is an intriguing company that pops up on the list of turnarounds as well. This is an intriguing company in the pulp business, with plants in Germany and Canada. The Canadian plant has excellent shipping access to fast-growing markets in China. As a bonus, the company markets the energy produced as a byproduct of the manufacturing process. This is a new name for me and it is trading right at tangible book value, so I will be digging deeper into Mercer this week.
Layne Christenson (LAYN) is one of the many infrastructure companies on my watch list. The company provides drilling services for infrastructure and energy companies, as well as civil construction and water management services. It is well positioned to be a major beneficiary of the inevitable infrastructure-spending boom. The company has posted a loss for this year but should be profitable next year. Analysts are rushing to downgrade the shares and I hope they continue. The stock is at 1.1x tangible book value and I would love to buy it lower.
As always, running screens provides not only new ideas but also valuable information about market and economic expectations. It can also confirm the cheapness and attractiveness of current holdings, such as Arcelor and Gafisa. I will be buying shares of National Bank Holding in the next few days and I am intrigued by Mercer's potential as well.
At the time of publication, Melvin was long MT and GFA.
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