Tredegar – be patient

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#1
NYSE Tredegar has undergone a business transition, shifting from mainly a plastic company to mainly an aluminum extrusion company. The company has shown improving operating efficiencies and financial soundness, with a low reinvestment rate and good capital allocation. However, the company operates in a cyclical sector and current valuations do not offer enough margin of safety. But the declining market price may present an opportunity later.

[Image: Tredegar.png]
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#2
Tredegar (NYSE:TG) is a company undergoing a business transition. 11 years ago, it was predominantly a plastic business with an aluminum extrusion business. Today, it is an aluminum extrusion company with a plastic arm.

But its performance since then is nothing to shout about. As can be seen from the chart, over the past 11 years, the contribution from the plastic products businesses has been declining. PAT was very volatile over the past 11 years with 3 years of losses. This led to an average ROE of negative 4%.

[Image: Chart-1.png]

Looking at the results, do you think that Tredegar made the correct strategic choice to focus on alumunium?
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