I’m sitting here waiting for the main event. In the meantime, yesterday Orchids Paper Products Company (TIS) reported and beat estimates. TIS is back to trading just below $30 a share.

Sales jumped 5% but earnings per share fell 7%. The company is highlighting that total earnings also rose, but they are sort of glossing over that the increase wasn’t enough to compensate for new shares outstanding. Still, TIS is growing so I will reserve judgment until I have a good look at the filing.

Anyway the market reaction is positive so the stock is up and that really matters most.

I bought TIS earlier this year.

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I bought Orchids Paper Products Company and Subsidiaries (TIS) earlier this year, back when I had just raised a large sum of cash and was looking for some new ideas to get away from the oil kill zone.

The company stood out as being a very solid business – good cash flow, strong sales, steady as she goes growth, boring business with few new competitors – you know, the kind of company that nobody wants to own.

Here, TIS is holding up very well, and I am quite surprised it is still down at $26 a share.

TIS is relatively small with only $210 million in assets, but it’s a good enough target for me. The shares are worth about $10.42 apiece by my estimation, and are currently going for $26. In the first six months of the year, we’ve seen a big increase in share value, even after issuing new shares, up from about $8.62 as of December 2014.

The companies operations are rewarding shareholders richly as of late. Net sales climbed 40% from the first six months of 2015 over the first six months of 2014. Basic income per share rose to $0.55, up from $0.40 period over period – 37.5% increase, matching the sales growth. Cash from operations is up 59.5%. It looks to me like this is real; not just a financial gimmick.

I had purchased this company in part because I saw an off radar business with solid fundamentals. But I also guessed that TIS would have the opportunity to make a lot of above average returns in the near future, thanks to all the meltdowns in South America leading to scarcity of basic paper products.

I still need to confirm where TIS is shipping product to, but even if that isn’t exactly what’s happened, I seem to be getting a pretty big payoff anyway. The company has a focus on US markets, but there is also some elusion to “Away From Home” sales, following the acquisition of Fabrica in Mexico. Regardless, TIS is growing at a 40% clip for the moment, and management seems eager to keep a fast tempo pace going.

It might be harder to materialize windfall gains than with a bigger company, since it’s unlikely institutional shareholders will come in and bid up the business. But that’s alright, I can get paid with distributions just fine.

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TIS is down 5.8% as of right now because they decided to price a 1.5 million share secondary offering. This is about 17% of outstanding shares so I can maybe see why the stock took a nice dive. The money is going to add another facility in South Carolina.

I have a longstanding policy not to overreact to secondary offerings, especially not when management can account for how they want to spend the cash. Just get the operation up and going in a reasonable timeline and these things have a habit of being neutral on existing shareholders…when they aren’t actually beneficial.

It’s the finance holes you have to look out for. But these are the companies that are losing money already. A profitable company rarely issues their way to losses.

I pay management to manage my companies for me. I’m not going to sit around micromanaging their choices, trading in and out like I have an attention disorder, because of something as stupid as a secondary offering. If they want another facility so bad they’re willing to make it happen right now, what does that say about expectations of future demand for product? So let them have it.

I’ll judge them on the outcomes.

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I am 70% long, and this is what my day looked like:

BAS +12.61%
CCJ +7.56%
HCLP +3.42%
ALDW +1.99%
VOC +1.76%
TIS +1.48%
OMAB +0.70%

It’s difficult to scoff at a day like that.

Yes I am still down from 2014. I have no desire to hide behind spin. 2014 was a horrible year. But as I said to those of you asking why I was still hanging around BAS, it was because BAS had 100% of upside…at least. And now here we are, closing in on $10 from $5.

I like all on the list. I’ve carefully vetted these positions and wouldn’t it be something if it was these same positions that ultimately redeemed me? I’m not wedded to the thought (for fear it will kill me) but it’s certainly quite possible.

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Not bad all things considered. CCJ, HCLP, OMAB and TIS all went higher, with HCLP up more than 4%, OMAB up more than 3%, and TIS up more than 2%. BAS was down 1%, but this is a process.

BAS just recently announced their rig count numbers. Utilizations are way down, from 67% at the beginning of 2014 to 56% today. 4% has occurred just since the start of the new year.

Well? We’ve seen that these methods are more expensive. Now let’s see how cheap they can be. And who’s going to be around next year. My guess; BAS are champs.

If oil prices run back to $100 now that Russia has decided to play nice, I will die from laughing. The days of global competition are done; the USA is the victor. I know you defeatists want to apologize for our might – it’s nothing but luck of course, and that is somewhat true – and rekindle the “peaceful” yester-years of blood thirsty despots butchering the peasants for land and spoils, never ending. Save your breath.

Someone was going to win this game sooner or later, and it looks like that someone is us. Rather than wishing upon us another 1,000 years of savagery, suck it up and move on. You could hardly ask for a more genteel ruler than America, no? What other nation has ever spent this much time self-reflecting and prostrating over the vanquished?

Our President’s order is about to smote tens of thousands to ruin. And when he is finished, he will give a long, sophomoric lecture on the importance of civility and equal opportunity in the global marketplace. Could you imagine the look on the faces of Genghis Khan or Alexander the Great, if they could see such a spectacle? I imagine they would have both cast down their arms and retired to spend their final days as hermits.

What comes next is very important. The crowd is skittish, but today surely helped. We need Brent to breach $60 soon, and it would be very constructive if bond yields of the safe havens could, you know…yield something again.

The people are very scared of the Eurozone breaking up…for why, I could not possibly tell you. The euro has brought nothing but suffering on the nations of Europe. It was as if a spattering of intellectuals across the continent tried to trick Germans, French, Greeks, Italians, Spaniards, Finnish, Austrians, Belgians, Irish, Dutch, and Portuguese people into thinking they were all from the same place, like they wouldn’t figure it out.

It seems that way because that was exactly what happened. Such a brainless ploy. And almost set up to fail, from the beginning. The number of American economists, almost uniformly and unanimously across all walks of life, that laughed at this idea; it is incredible.

I will spoil the ending. Greece is going to walk away from the Eurozone, and nobody will care.

Did creating the Eurozone destroy the global economy in the first place? There were many currencies that were trading one day that didn’t the next. The euro came out and life went on. Reversing the process is no different, except at the end of the rainbow, Greece defaults and ruins their credit rating for a decade, and a bunch of banks get whacked (what else is new?). Then voila! we have a brand new example of what not to do when managing a country, as Greece becomes the butt of jokes for a half century (see France as to fighting wars or Venezuela as to not being filthy animals, for reference).

I remain cash heavy for now, but am looking for that moment when people start getting excited again.

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I purchased shares of TIS for $25.57, bringing my cash position down to 50%.

TIS is a smaller scale North American company that specializes in toiletry paper products. They have good financials and a reliable little operation. A nice little cash generating machine which, as of today, is available at an 8% discount to yesterday.

Not exciting or interesting at all, yet well positioned.

I’ve also got a hunch that companies like TIS will have surprise growth ahead. As I look at more or less the complete dissolution of an entire economy in South America, I can’t help but think that this kind of boring business will have some interesting opportunities over the next few years.

Venezuela is not going to stabilize without outside help. Maduro is too stupid to pull this off alone; the bus driver is going to need to allow some major imports of foreign goods at market prices to stabilize his economy. Or, more likely, whichever successor is first to be found standing over Maduro’s lifeless body will. An entire country is not going to be supplied by any one source, so I’d put good odds that manufacturers of basic products like this, all over North and South America, will stand to profit as supplies redirect southward.

Venezuela may be the worst, but hardly the only party here. There are a handful of similar styled countries in South America that have looming problems and will likely end up becoming ripe targets for North American supply.

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