 Weekly Paper Archive
Airlines |
| This Week in Paper by Joe Masters (TMF Master) Charleston, SC (July 4, 1997) -- Happy Independence Day! Fireworks were certainly in order this week as nearly all market indices set records. The Paper/Forest sector did not fare quite as favorably, but it did still manage to gain a respectable 0.92%, compared to 2.71% for the Dow and 3.34% for the S&P 500. Leading the way this week were KIMBERLY-CLARK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KMB)") else Response.Write("(NYSE: KMB)") end if %>, catching up on its lagging performance by rising 7.00%; GAYLORD CONTAINER <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: GCR)") else Response.Write("(AMEX: GCR)") end if %>, gaining 6.61%; CHAMPION INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CHA)") else Response.Write("(NYSE: CHA)") end if %>, adding 3.40%; and INTERNATIONAL PAPER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IP)") else Response.Write("(NYSE: IP)") end if %>, up 3.19%. Falling behind were TEMPLE-INLAND <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TIN)") else Response.Write("(NYSE: TIN)") end if %>, off 1.72%; CONSOLIDATED PAPER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CDP)") else Response.Write("(NYSE: CDP)") end if %>, dropping 1.58%; and JEFFERSON SMURFIT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JJSC)") else Response.Write("(Nasdaq: JJSC)") end if %>, declining 1.54%. Taking a look at the second quarter, this was the finest period for Paper/Forest stocks since 1995. Remember, though, that this was also the 6th-best quarter in the past 70 years for percentage gain in the general market. Our Paper/Forest index gained a whopping 13.65%, but that still paled to the 16.55% gain for the Dow and the 16.91% rise in the S&P 500. Notable gains this quarter included FORT HOWARD <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FORT)") else Response.Write("(Nasdaq: FORT)") end if %>, which rose 62.65% following the planned merger with JAMES RIVER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JR)") else Response.Write("(NYSE: JR)") end if %>, which happened to gain 27.04% this quarter. The larger corrugated box makers did very well. Jefferson Smurfit rose 34.74%, STONE CONTAINER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STO)") else Response.Write("(NYSE: STO)") end if %> tacked on 28.65%, and Gaylord Container was up 26.82%. Of course, these were some of the biggest laggards in the sector, so these gains were not quite as surprising. Also beating the market were WESTVACO <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: W)") else Response.Write("(NYSE: W)") end if %>, rising 25.13%, International Paper, gaining 24.52%, Champion International, up 21.43%, PH GLATFELTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: GLT)") else Response.Write("(AMEX: GLT)") end if %>, adding on 21.21%, BOWATER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BOW)") else Response.Write("(NYSE: BOW)") end if %>, rising 18.97%, GEORGIA-PACIFIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GP)") else Response.Write("(NYSE: GP)") end if %>, up 17.76%, and MEAD CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MEA)") else Response.Write("(NYSE: MEA)") end if %>, gaining 17.45%. Trailing the field during the second quarter were Kimberly-Clark, which was flat; Temple-Inland, up 2.86%; Consolidated Paper, rising 3.60%; and UNION CAMP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UCC)") else Response.Write("(NYSE: UCC)") end if %>, gaining 6.10%. All the News that Fits the Print: Monday Suomen Optioporssi put the value of northern bleached softwood pulp at $569.70 per ton, up from $563.86 last week. In June, the PIX mean was $559.83, up from $541.51 in May and from $518.12 in April. The PIX mean was $522.28 in March, $546.59 in February and $556.86 in January. New home sales rose by 7.1%. The monthly increase in total new home sales for May was the largest since an 11.6% rise in November 1996. The number of months' supply at the current sales rate for May was the lowest since March 1971 when it was 4.0 months. The number of homes for sale in May was the lowest since July 1993. A federal judge blocked the merger of office superstores STAPLES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SPLS)") else Response.Write("(Nasdaq: SPLS)") end if %> and OFFICE DEPOT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ODP)") else Response.Write("(NYSE: ODP)") end if %> saying federal regulators had shown the deal could limit competition. The FTC had asked to stop the $3.5 billion deal, saying it was anti-competitive and would burden consumers with higher prices for items from pencils to computer paper. Temple-Inland denied allegations made by a former employee in a wrongful termination lawsuit. The former accountant of Temple-Inland said that the company underpaid its federal income taxes and filed misleading financial reports, and that he was fired for refusing to participate in the unlawful act. Temple-Inland also said Monday that it completed the acquisition of CALIFORNIA FINANCIAL HOLDING CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CFHC)") else Response.Write("(Nasdaq: CFHC)") end if %> for about 1.62 million shares and $47.35 million. The operations of California Financial's Stockton Savings Bank F.S.B. unit will be merged into Temple-Inland's Guaranty Federal Bank unit. FLETCHER CHALLENGE LTD. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:FLP)") else Response.Write("(NYSE:FLP)") end if %> said it has purchased a half share of Australian Newsprint Mills from Rupert Murdoch's NEWS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NWS)") else Response.Write("(NYSE: NWS)") end if %> for $293.5 million (Australian). The purchase will give Fletcher, which has owned the other half of ANM since 1988, full ownership. Tuesday GREIF BROTHERS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GBCOA and GBCOB)") else Response.Write("(Nasdaq: GBCOA and GBCOB)") end if %> announced the acquisition of Centralia Container, Inc. of Illinois, a corrugated container company. Terms of the agreement were not disclosed. Canadian forestry firms tabled a new set of proposals, yielding somewhat to union demands, to continue talks with the union representing lumber workers in British Columbia, forestalling the chance of a strike vote. First Boston said it cut CARAUSTAR INDUSTRIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSAR)") else Response.Write("(Nasdaq: CSAR)") end if %> to hold from buy. No details were given (of course). SONOCO PRODUCTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:SON)") else Response.Write("(NYSE:SON)") end if %> gained nearly 10% after being cited in the Lehman Brother's list of "Top 10 Uncommon Values." Wednesday On Wednesday, Salomon Brothers started coverage of AMERICAN PAD & PAPER CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AGP)") else Response.Write("(NYSE: AGP)") end if %> with a "buy" rating. The brokerage firm estimated 1997 net income of $1.25 a share and said its 12-month price target is $25 to $28, which does not include any future acquisitions that would allow the stock to trade higher. "Model Portfolio" Update: The downgrade of CARAUSTAR <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSAR)") else Response.Write("(Nasdaq: CSAR)") end if %> hurt our port-faux-lio a bit this week. This makes the second downgrade for Caraustar in the past three weeks. Interestingly, the selling volume on the news was very light, and the stock trades at approximately 4% higher than it did before the downgrades. Purchase: IP = $40.50, CDP = $49.13, CSAR = $29.00, TFT = $10.75 Last Trade: IP = $50.63, CDP = $54.63, CSAR = $32.50, TFT = $10.44 This Week: Year-to-Date: Model = - 0.78 % Model = + 36.14 % SP500 = + 3.34 % SP500 = + 23.78 % FSPFX = + 1.04 % FSPFX = + 9.50 % Upcoming Earnings as per First Call: Tues: International Paper -- Estimate $0.15, Last Q $0.11, Year Ago Q $0.33 Thurs: Georgia-Pacific -- Estimate $0.23, Last Q $0.11, Year Ago Q $0.61 Thurs: Potlatch -- Estimate $0.35, Last Q $0.22, Year Ago Q $0.63 Thurs: Consolidated Paper -- Estimate $0.67, Last Q $0.63, Year Ago Q $1.10 Commentary: While this is the Paper AND Forest report, I will be the first to admit that my knowledge of the Forest and Wood Products segment is definitely lacking relative to the Paper area. However, I would like to pass along some interesting websites that I have located in my search for truth. The first series of sites come from the Chicago Mercantile Exchange. While I by no means suggest that you engage in the trading of commodity futures, there is some information here that could be useful in assessing the current state of affairs relative to the historical perspective. For a 4-year chart on lumber futures, go to: http://www.barchart.com/cme/cmewlb.htm. For the same on oriented-strand board (OSB), go to: http://www.barchart.com/cme/cmewob.htm. It is interesting to see the declining trend in both commodities, though this is no predictor of coming results. To obtain current quotes on either material, go to: http://www.cme.com/market/quote/.Small/lb.html for lumber and: http://www.cme.com/market/quote/.Small/bd.html for OSB. As the wood products segment is quite sensitive to the housing and construction markets, you might find some valuable information at the site of the National Association of Home Builders, whose address is: http://www.nahb.com. Particularily noteworthy is their forecast for declining home sales in 1998 and 1999. To view historical data on home sales, you can visit the Census Bureau at: http://www.census.gov. Performing a search on "new home sales," for instance, will elicit data pertinent to this sector.
Keep them presses rolling !!! |
© Copyright 1995-2000, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. The Motley Fool is a registered trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us