Monday, April 20, 2015

Stock Bought: TIS


Today I initiated a position in Orchids Paper Products.

  • TIS:  100 shares @ $23.30 --- Yield  6.01% (initial position)

Total capital invested is $2336.95 which will increase my yearly dividend by $140.00.

I originally learned about the company about a year or so ago from one of Dividend Mantra's posts. I have never invested in a thinly traded company before, so I had no idea what the trade price would be looking at the bid/ask screen. It was bidding $23.20 and asking $23.80 this morning so I decided to use a Limit Order this time. I put my order in at $23.30 and it finally picked it up thirty minutes later.

This in my opinion is speculative and the dividend growth as of right now in non existent. However I am willing to roll the dice with these types of investments and at 6% yield I feel the risk reward is justified at this price.

I keep telling myself to stay away from companies like MAT, ESV, and TIS and I have been for the most part this year. I just get the itch every once in a while to jump into the speculative side of the pool and here I am once again.

Feel free to give me your opinions on this purchase: Thumbs up or thumbs down??

DEFY MEDIOCRITY

10 comments:

  1. Looks like a good opportunity to take advantage of weakness here. Earnings miss & stock offering on the same day, while are fairly rare, seem to cause short-term weakness.

    ReplyDelete
    Replies
    1. BGH,

      I agree! This may or may not be a long term holding for me. I think it is a value and will watch the dividends closely. Right now it is trading over 200k shares and only averages around 32k shares a day. Liquidity could be a problem with this company as is evidenced by its large bid/ask spread.

      MDP

      Delete
  2. From an income stand point it seems like a good move and valuation. However, I don't know if it is the best for growth. Hopefully it works out well for you, and I plan on watching you and Mantra to see how you do with it.

    -Gremlin

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    Replies
    1. DG,

      I don't think the dividend will be increased any time soon, but it is yielding 6% so that's pretty impressive. Also they just declared another $.35 dividend for May so it looks like they are well capitalized for now.

      MDP

      Delete
  3. Not my type of move because of the non existent growth rate, but I see why you're going with it! ;-) 1 thumbs up and one down? haha!

    ReplyDelete
    Replies
    1. DG,

      Fair enough. I started with a small position and will monitor it closely. I think at 6% even without any current dividend growth, it is a good income producer.

      MDP

      Delete
  4. Good luck with TIS. The payout ratio and FCF are against you. The yield is relatively high vs the avg yield which is a positive. This is definitely a risk, reward play.

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    Replies
    1. Div4son,

      The yield does seem a bit high for a company still in the growth stage. Hopefully it stays at its current $.35/share. This is a spec play and if it turns out badly, so be it. I have enough other companies that are of the more stable variety. If by chance it jumps back up to $30 I will probably dump it.

      MDP

      Delete
  5. Got crushed today because they will be issuing more stock to build a plant in SC. I have owned this stock for a long time and I believe you made a good buy.

    ReplyDelete
    Replies
    1. Anonymous,

      I sure hope you are right. I was watching TIS recently drift down into the mid 20s and today it fell further around $23. This is near the 52 week low, so I thought I'd take a chance on it. We'll see how it plays out.

      MDP

      Delete