Marcato Capital Management's Mick McGuire said that Rayonier Advanced Materials' stock price could triple.
With shares currently trading around $20, the manager said he wouldn't be surprised to see the price rallying to $60 over the next few years.
Key to this view, he said, is the successful incorporation of recent acquisition Tembec into the company. The 2017 Tembec purchase combined two high purity cellulose businesses and diversified Rayonier's product offerings with integrated forest products.
Specialty cellulose is used in the production in a variety of industries, from chemical thickeners and paint to pharmaceuticals. Rayonier, based in Jacksonville, Florida, has a market value of $1.1 billion.
McGuire's comments at the 13D Monitor Active-Passive Investor Summit in New York were for the first time the fund manager discussed the investment in a public setting. Marcato owned a 3 percent stake as of the end of last year, according to filings.