is pxupa a buy?, page-58

GrahamCC, the big boys who currently are substantial shareholders in PPX include:
*Orbis (increased holding this yr to over 18%),
*Schroeder (increased holding this yr to over 11%),
*Mapple Brown (holding over 12%)
*Franklin (over 5%)
*NAB (now dropped to over 6%, from 11% late last yr).
NAB has been following other two banks, who were substantial shareholders in PPX last yr, namely CBA and SUN, in reducing their holdings. Other substantial shareholders above have held or increased their positions since late last year. But they might be lending the stock to shorters of course, even though that cannot be helping their overall situation on the stock. Don't be surprised if they (and others) pile up on the first inkling of a positive news about to come from the company.

Paper industry, as we all know, is at a low at this point in time, but the good thing about PPX (part from its low debt and high NAB) is that it is no longer a manufacturer that has a fixed cost base in a high-value currency like $A whilst trying to sell its goods in competition with cheaper imports. PPX has the flexibility to buy its paper products from low-value currency regions and sell elsewhere, and compete effectively with importers. There is of course a delay in changing supply arrangements, as existing contracts have to run their course.

Besides PPX is entering into high-value products and services to broaden its revenue base. I believe FY11 will be its last negative after-tax result year, and we'll see a positive and improving performance from next year onwards!