Who would have thought an old standard like paper would have pulled in so much cash in the last year? As it turns out, two of the top-20 performing stocks on the Russell 3000 Universe of stocks were paper companies - and the rest of the sector was not far behind.
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The cynical among us would have it that these companies profited from the unprecedented increase in U.S. dollars created to fend off last year's financial crisis. All kidding aside, good management and a rebound in an already depressed market sector had more to do with the outsized gains we discuss below. (See how far the country has come from 2008 in our article Financial Crisis Report Card: One Year Later.)
Here they are: five stellar paper performers since the New Year, complete with vital stats for your investment edification.
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Boise Inc. (NYSE: BZ) leads the pack with a stellar year-to-date (YTD) rise of over 1100% and a whopping 10400% since coming off lows set in March of this year. Boise earns a living manufacturing packaging products such as newsprint, corrugated paper, market pulp, container board, labels and other direct-purchase items for home and office.
The company is enthusiastic about its new "Boise Block" flexible packaging papers, which it believes will be a hit with the food industry. The product holds out oil and grease in a number of food-packaging applications.
Clearwater Paper (NYSE: CLW) trades with a forward P/E of 11, a price-to-sales ratio of just 0.4 and has a market cap of $525 million. YTD, five separate insiders have made stock purchases totaling in excess of $360,000. Each of them earned between 100% and 625% as the stock has risen over 460% YTD and close to 700% since its March 2009 lows.
Heavy Paper Hitter
International Paper (NYSE: IP) is one of the biggest outfits in the forestry and paper sector and was, until 2004, a component of the Dow Jones Industrial Average. The company has a market cap just shy of $10 billion and is up 480% from its 52-week low.
Temple Inland (NYSE: TIN) and Graphic Packaging Holding (NYSE: GPK) are southern-based paper package manufacturers, both of whom have seen sizable returns on their stock this year. TIN is up almost 590% from its lows and still offers a not-unfriendly 2.48% dividend yield. GPK has appreciated more than 325%. It carries a price/book ratio of 1.52 and price/sales of 0.20.
The paper sector has literally been printing money for investors in 2009. Those seeking a piece of this investment niche should begin with a look at the above-named issues, each of which has delivered results that significantly outperformed the broader markets YTD.
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