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  "docSlug": "09bbf36d82e5",
  "documentTitle": "Avery Dennison Corporation (AVY)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2020-11-10 00:00:00",
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  "pageNumber": 49,
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  "notes": "Uses a table to calculate 'Cash Available' and then presents two specific quotes from SEC filings to highlight management's hedging language.",
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      "kind": "callout",
      "text": "We cannot guarantee that we will continue to repurchase shares of our common stock or pay dividends on our common stock or that repurchases will enhance long-term stockholder value. Changes in our levels of stock repurchases or dividends could affect our stock price and increase its volatility.",
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      "text": "Although we increased our quarterly dividend rate by approximately 7% in October 2020, having earlier this year maintained it due to the impact of COVID-19, there can be no assurance that we will maintain this increased rate, particularly if the situation deteriorates.",
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      "kind": "callout",
      "text": "We believe this supports our concerns that AVY’s Free Cash Flow is overstated and cannot be taken at face value.",
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      "text": "Free Cash Flow: $500.0",
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      "kind": "paragraph",
      "text": "Avery is expanding risk factors around its ability to sustain share repurchases and dividends. It curtailed share repurchases in Q1 – Q2 2020. Yet, if we are to believe its Adjusted Free Cash Flow forecast, it should have ample ability to fund both the dividend and incremental share repurchases. We believe this supports our concerns that AVY's Free Cash Flow is overstated and cannot be taken at face value.",
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      "text": "\"We cannot guarantee that we will continue to repurchase shares of our common stock or pay dividends on our common stock or that repurchases will enhance long-term stockholder value. Changes in our levels of stock repurchases or dividends could affect our stock price and increase its volatility.\" — 2019 10-K, p. 13; \"Although we increased our quarterly dividend rate by approximately 7% in October 2020, having earlier this year maintained it due to the impact of COVID-19, there can be no assurance that we will maintain this increased rate, particularly if the situation deteriorates.\" — 2020 10-Q, p. 41",
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      "text": "AVY 2020E Adjusted Free Cash Flow: ~500.0; Less: Tax Withholding Payments Stock Comp Programs: (20.5); Cash Available For Dividend Payment: 479.5; Less: Estimated 2020 Dividend Payment: (197.0); Less: YTD 2020 Share repurchases: (52.2); Cash Available For Stock Repurchases: 230.3",
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      "kind": "title",
      "text": "If AVY's $500m FCF Forecast Is Accurate, Why Would The Dividend And Share Repurchases Be In Question?",
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