International Paper Company (NYSE:IP)

I admit, I'm riding Cramer's coattails on this one, but the shift toward corrugated products and international expansion, plus a nice dividend and low multiple, I think the downside risk is minimal. Upside potential attractive.

International Paper Company (IP) is a paper and packaging company that is complemented by a North American merchant distribution system, with primary markets and manufacturing operations in the United States, Europe, South America and Asia.

The following data is current as I type this September 23, 2011. At the current price of $25.02/shr, the p/e is less than 9, and the yield is about 4¼%. The 52-wk range is $20.77--$33.01 with the high set last May and the Low in October of 2010. 83% of shares are owned by institutions. The stock is generally considered a 'buy' by sell-side analysts. The main concern among analysts is that IP may be paying too much for Temple Inland.

Disclosure: I own shares of IP common stock in real life with an average cost of $25.19.

Gross over payment for temple. Plus the big risk of the bank fraud lawsuit.

alphapickstweet

Beaten down blue chip with low P/E yielding >4%. Hoping market downturn will mitigate risk that IP will overpay for Temple Inland.

International Paper aggressively going global. Joint venture in Russia and India - fast growth here. And finally has ROIC that matches my expection.

Cheap valuation, just raised their diividend. Easily beat expectations with latest earnings release.

Paper, and paper products are not going anywhere, they will always be a staple of our society in some form or another. provided IP can keep out of environmental trouble this stock should continue to perform well for quite a while. at least until graphine yields us transparent viewers and launches us into the sci-fi realm

The stock has been beaten down too much. They have managed to keep accounts receivable and inventory in line with growth. Certainly better than competitors that are more highly rated.

Higher packaging costs being seen across the board. As the economy gradually (painfully) recovers, consumer spending will drive increase in product shipments, resulting in a greater need to product packaging.

Large risk involved with the company's reliance on the tobacco industry for packaging orders. NY State's tax increase (although I don't smoke, the thought of a government mandated $10 pack of cigarettes really lights my fire) on cigarettes may be replicated by other states seeking to close budget gaps. This price increase may spur some lower-income smokers to curtail their habits, hurting cigarette orders from large tobacco companies. However, since people will still smoke through the good and the bad, risk is minor relative to the company's potential for growth.

projected earnings 12mo

Growing Chinese demand for wastepaper, and IPs strong infrastructure from recent acc.

World is short on Cellulose

undervalued

Big into cardboard, when manufacturing picks up products are shipped in cardboard.

Large game player in good sector

with the acquisition of weyerhauser's recycling and packaging, as a paper company I believe it has a better chance of growing then most.

As the global economy recovers demand for paper related products will increase. IP took a hit like most companies in late 2008 / early 2009. Also like most companies they have taken steps to deal with the market situation and have started to recover but they have a plenty of room to run still.

This stock is overbought, and the company is in a shrinking industry.