April 17, 2018 / 5:33 PM / 9 days ago

UPDATE 1-Marcato's McGuire bets Rayonier Advanced Materials stock will jump

(Adds details about investment, stock price)

By Svea Herbst-Bayliss

NEW YORK, April 17 (Reuters) - Hedge fund manager Mick McGuire said on Tuesday that Rayonier Advanced Materials Inc’s stock price could triple if the company focuses on integrating a recent acquisition and cutting costs.

McGuire’s Marcato Capital Management began buying the stock last year and spoke about the chemical company that specializes in cellulose-based products publicly for the first time on Tuesday at the 13D Monitor’s 2018 Active-Passive Investor Summit.

“The company should concentrate on integrating its recent acquisition, paying down debt and buying back stock,” McGuire said.

Rayonier late last year made a “very accretive acquisition” and there are plenty of what McGuire calls “self-help” actions to help boost the share price.

McGuire said Rayonier’s stock price could rise to somewhere between $34 to $60 a share from its current level of $21.94 in roughly three years.

The hedge fund, which is based in San Francisco and delivered a 26 percent gain last year, engaged with management earlier this and agreed to put Marcato partner Matthew Hepler onto its board.

McGuire said his team could be a resource to management and support the board with analysis that it might not otherwise be able to access.

Thanks to its Tembec acquisition, Rayonier now has 47 percent of market share, up from 32 percent, and the hedge fund expects that there will be fresh synergies between the two companies. Also McGuire said that the company will become stronger by selling off some businesses that came along with Tembec but are not critical to the core business.

The stock price climbed over 3 percent after McGuire made his presentation.

Reporting by Svea Herbst-Bayliss; editing by Jonathan Oatis and Cynthia Osterman

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