Rayonier Advanced Materials Inc. (RYAM): A Bull Case Theory

We came across a bullish thesis on Rayonier Advanced Materials Inc. (RYAM) on Value Degen’s Substack. In this article, we will summarize the bulls’ thesis on RYAM. Rayonier Advanced Materials Inc. (RYAM)’s share was trading at $ 3.87 as of 3^rd June. RYAM’s trailing P/E was 47.20 according to Yahoo Finance.

Rayonier Advanced Materials (RYAM), a cyclical industrial company focused on cellulose specialties like fluff pulp, presents an intriguing but high-risk opportunity for investors who can time market cycles effectively. Over the past five years, its stock has tripled multiple times, rewarding those with a well-timed entry and exit strategy. Currently trading at $3.74, the company attracted attention after CEO Delyle Bloomquist purchased $250,000 worth of shares at $3.95 in mid-May 2025, signaling insider confidence.

While the stock may still face near-term downside or stagnate, its long-term upside remains intact if global demand for cellulose-based products persists. Investors recognize RYAM as a trading vehicle rather than a long-term compounder, due to the inherently cyclical nature of its end markets. The rapid recovery potential of its share price—historically rebounding to around $10 during upcycles—makes it particularly appealing, especially when other commodity plays like offshore drilling or precious metals remain sluggish.

However, the company’s leverage is a glaring concern. With $700 million of senior secured debt at SOFR +7% due in 2029, RYAM is burdened by $88 million in annual interest expense—nearly two-thirds of its trailing twelve-month EBITDA of $138 million. This gives it a precarious interest coverage ratio of just 1.56x. Still, such capital structures are not uncommon in its industry, and its competitors share similar debt dynamics. Trading at a deeply discounted price-to-sales ratio of 0.16x, RYAM remains a speculative yet potentially lucrative investment for those willing to ride the cycle—and time their exit wisely.

We have covered a standout stock report of a bullish thesis on Sable Offshore Corp. (SOC) by the same author in October 2024. At the time, SOC shares were trading at $20.52 and has since appreciated by approximately 17%, reinforcing the strength of the author’s thesis.

Rayonier Advanced Materials Inc. (RYAM) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held RYAM at the end of the first quarter which was 24 in the previous quarter. While we acknowledge the risk and potential of RYAM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.