NEW YORK, May 16, 2011 /PRNewswire/ -- Neenah Paper (NYSE: NP $23) has been picked by Standard & Poor's Equity Research as its Focus Stock of the Week. NP carries S&P's highest investment recommendation of 5-STARS, or Strong Buy.
"Over the long term, we expect NP to exhibit higher margins and cash flow due to growth in higher-margin specialty paper businesses," said Stuart Benway, Paper & Forest Products Equity Analyst at Standard & Poor's Equity Research. "Profitability should benefit from optimizing the product mix, faster growth of wider-margin products, new product sales generated through innovation and R&D efforts and overall benefits of volume and scale efficiencies. With its strengthened balance sheet, Neenah could also look for accretive acquisitions to provide additional growth opportunities."
Benway notes that Neenah has established several strategies to create value for its customers and shareholders. He points to the increase in the mix of technical/specialty products as one such strategy. "This category comprised almost 60% of sales in 2010, but the company expects it to expand to an even larger proportion in the future as it continues to pursue growth in faster-growing, profitable specialty and technical products markets," said Benway. "We expect this to occur through both internal growth and acquisitions."
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