Does Clearwater Paper Corporation (CLW) Have the Potential to Grow Mid-Cycle FCF?

3 weeks ago 22

Soumya Eswaran

Wed, February 25, 2026 astatine 7:05 AM CST 3 min read

Longleaf Partners, managed by Southeastern Asset Management, released its “Small-Cap Fund” fourth-quarter 2025 capitalist letter. A transcript of the missive tin beryllium downloaded here. Longleaf experienced respective environments passim its acquisition successful small-cap investing. This year, the underlying developments successful the Fund’s holdings were much promising than the existent banal terms returns erstwhile compared to the people of ostentation positive 10% and the antithetic show of the Russell 2000. In Q4 2025, the Fund returned 1.13% compared to 2.40% for the Russell 3000 Index and 2.19% for the Russell 2000 Index. The Fund’s yearly instrumentality was 7.56% compared to 17.15% and 12.81% instrumentality for the indexes, respectively. In 2025, Southeastern demonstrated beardown show by protecting investments during marketplace volatility, emphasizing the worth of owning solid, escaped currency flow-generating companies implicit speculative fads. In addition, delight cheque the Fund’s apical 5 holdings to cognize its champion picks successful 2025.

In its fourth-quarter 2025 capitalist letter, Longleaf Partners Small-Cap Fund highlighted stocks similar Clearwater Paper Corporation (NYSE:CLW). Clearwater Paper Corporation (NYSE:CLW) is simply a starring shaper and supplier of bleached paperboard packaging products. The one-month instrumentality of Clearwater Paper Corporation (NYSE:CLW) was -17.07%, and its shares mislaid 46.90% of their worth implicit the past 52 weeks. On February 24, 2026, Clearwater Paper Corporation (NYSE:CLW) banal closed astatine $14.38 per share, with a marketplace capitalization of $231.578 million.

Longleaf Partners Small-Cap Fund stated the pursuing regarding Clearwater Paper Corporation (NYSE:CLW) successful its 4th fourth 2025 capitalist letter:

"Clearwater Paper Corporation (NYSE:CLW) – Packaging institution Clearwater Paper was a detractor for the year. We bought shares of Clearwater successful April. The banal has since sold disconnected arsenic the already anemic coagulated bleached sulfate (SBS) paperboard marketplace showed fewer signs of improving. The marketplace has been depressed and beneath mid-cycle owed to oversupply problems that were exacerbated by a rival conversion earlier this year. Clearwater continues to run good what it tin control, arsenic evidenced by gathering synergy targets from a ample and opportunistic acquisition completed past year. The clearest mode the oversupply occupation volition beryllium fixed is done capableness closures, but assistance is besides coming successful the signifier of tariffs connected competing European capacity, arsenic good arsenic a weaker dollar that makes these imports little appealing. Management has a beardown superior allocation way grounds and precocious decided to absorption connected stock repurchase aft moving an investigation connected a precocious instrumentality but time-consuming project. We hold with this determination arsenic the concern trades astatine a debased single-digit aggregate of increasing mid-cycle FCF."

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