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Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Equity Bottom-Up

Rayonier Advanced Materials / Equity Bottom-Up

<ul><li>2024 results look to exceed expectations.</li><li>Earlier this month, RYAM previewed its 2024 annual results that appear to exceed current Street and our estimates for revenue, EBITDA, and free cash flow generation, as the company benefited from improving supply/demand trends in the cellulosics industry, a better mix, and strong shipments as 2024 came to a close, underscoring its improved portfolio and value over volume strategy helped by market conditions.</li><li>2025 preview implies continued improvement. While management will provide formal guidance for 2025 during its 4Q24 earnings call, which should take place in early March 2025, the company expects its cellulose specialties business to see mid- single-digit Y/Y price improvement partially offset by similar levels of decline in volume, as it continues to pursue its mix- enhancing strategy, in line with our current expectations.</li></ul>

2024 results look to exceed expectations.Earlier this month, RYAM previewed its 2024 annual results that appear to exceed current Street and our estimates for revenue, EBITDA, and free cash flow generation, as the company benefited from improving supply/demand trends in the cellulosics industry, a better mix, and strong shipments as 2024 came to a close, underscoring its improved portfolio and value over volume strategy helped by market conditions.2025 preview implies continued improvement. While management will provide formal guidance for 2025 during its 4Q24 earnings call, which should take place in early March 2025, the company expects its cellulose specialties business to see mid- single-digit Y/Y price improvement partially offset by similar levels of decline in volume, as it continues to pursue its mix- enhancing strategy, in line with our current expectations.

Rayonier Advanced Materials, Inc. - Improving Fundamentals Bolstered by BioNova Optionality