Hey there,
Supply/demand and pricing power have been difficult over the past couple of years. That said, management used a more optimistic tone in the last quarter and has signaled that the market may be turning around (for the better). The pandemic impacted operations quite significantly, and it has taken a while for them to see a return to normal. The company is also cyclical, so it is subject to prolonged periods of stagnation - which it has experienced in recent years. Now that management has started to take a more positive tone, it sounds like it is gaining market share and its product mix is more diverse and less cyclical than its peers which is being reflected in recent results. In fact, the company raised guidance last quarter.
This is not to say that a turnaround will happen overnight, but it was notable that for the first time in quite some time, management seemed cautiously optimistic on their latest conference call. The reason we added it to the high-yield portfolio is that despite the headwinds, the dividend was well covered and remains so as investors are rewarded with a high yield while they wait for business to turn around.
Mat