Just got finished reading Barron’s midyear roundtable. The roundtable has 11 members, each giving his or her view on the economic outlook for the next year or so and some stock picks. It’s always interesting to see what companies the big boys like.
The most interesting company I saw was Tredegar, a company located in Richmond, Va. that makes diaper components. Yes, diaper components. This was a pick by Mario Gabelli, CEO of GAMCO Investors. Gabelli writes:
The number of children 4 years old and under is going to stay flat at about 600 million for the next 30 years, but the use of diapers for incontinence is rising dramatically with the elderly population. Third-party pay is increasing. Tredegar also makes a fiber shield for flat-screen devices, and has an aluminum-products business. The company has 34.5 million shares and has been buying in its stock, which trades for 14.50.
Makes sense to me; we are going to have more boomers needing diapers. Gabelli also says there is a potential for a takeover or management taking the company private. Two other factors going for Tredegar is the large insider ownership of 15.5% and it’s trading very close to its book value. The P/B ratio right now is about 1.05-1.07.
No shit!