With all the ups and downs of the stock markets last week, the forest products industry -- particularly International Paper -- managed to garner some positive attention from analysts.
On 09 August, Jim Cramer, the very loud host of “Mad Money” on the CNBC network, rated stocks of International Paper, Kimberly-Clark, and Mercer International as worth buying. A couple weeks earlier, Cramer had even interviewed John Faraci, IP’s CEO, during the show.
Among key points touched on during the interview were that International Paper's ventures into market pulp in Russia have fared well, and the focus of IP’s leadership has been to manage for the today’s market rather than what it used to be.
Motley Fool, another popular source for investment insights, last week listed International Paper as the most watched paper products stock, followed considerably further back by Orient Paper and Mercer International.
Even with minor declines in their stocks, International Paper, MeadWestvaco, Buckeye Technologies, Domtar, and Wausau Paper, were listed as the five paper products companies with the best relative performance mid-week by SmarTrend, although continuing declines in Domtar’s stocks were a concern.
Business journalist and blogger Dana Blankenhorn also posted some notable comments about International Paper last week. He identified two events keeping IP stocks down at the moment: U.S. Justice Department review of IP’s intended acquisition of Temple-Inland (which he believes will be okayed), and decline in demand for various paper grades in North America (which he believes could be offset by growth elsewhere in the world).
“If you can get a yield of over 4% on a stock when U.S. 10-year bonds are still trading at a little over half that, and the government paper isn’t even AAA, why would you not?” Blankenhorn said. “Don’t put all your money on IP, but your safe dollars will stay safe there for a long time.”
Sounds like an apt description for the kind of stocks in which Baby Boomers might like to park some of their retirement funds as the economy continues to stumble toward recovery.