Buy signal on Svenska Cellulosa (SCA.B-SE)

We had an Enter Long Strategic signal on 15 December, 2021, triggered by our system on SCA.B-SE, Svenska Cellulosa , the Swedish paper & packaging Company.

Our system also triggered an Enter long Tactical signal on January 26, 2022 that imply a likely bullish acceleration. SCA has a rather strong track record, with a Behavioral score of 10/10, therefore the bullish signal is to be considered as mainly strategic.

Svenska Cellulosa is a SEK 114 Bn market cap company which owns forests that are located in northern Sweden. Svenska Cellulosa SCA is engaged in managing the forest and providing supplies from the paper industry. The Company offers paper for packaging and print, pulp, wood products, renewable energy, services for forest owners and efficient transport solutions.

Groups’s revenues split between the production of packaging paper (43% of sales), the sale of forest products (34%) and pulp production (23%).

The core of SCA’s business is the forest, Europe’s largest private forest holding (its forest in Sweden reprent 6% of the whole country). Around this resource, the Company built a well-developed value chain based on renewable raw material from its own and others’ forests.

SCA reported strong Q4-21 results, with increasing prices in all segments, exit publication paper, good production and stable cost base. The EBITDA was up 105% yoy driven by higher prices on solid wood, pulp and kraftliner, higher volumes and higher production.

For 2021, SCA reported a SEK 18.8 Bn revenue coupled with a 37.5% operating margin, with assets representing SEK 96 Bn.

Short term catalyst : Forest assets increased value, robust wood market prices.

This signal looks consistent with the European Paper & Packaging sector in Major Bullish Trend. There is 471% of stocks part of the sector in bullish tactical signal and 47% in bullish strategic signal.