VP of Common Sense

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  • International Paper Beaten to a Pulp: Time to Buy?
    And by 'falls' I mean rises or strengthens in the 4th sentence. My bad.
    May 06 08:38 am |Rating: 0 0 |Link to Comment |View article
  • International Paper Beaten to a Pulp: Time to Buy?
    Here's the catch with IP: the products they produce are mostly freight friendly commodities.

    Hard rolls of paper and linerboard are very suitable for ocean liner transit due to their high density. In my opinion a bet on IP is really a bet on the dollar. If the USD continues to fall they should make record profits (strong exports), but if it falls their profits could easily go to nearly zero (strong imports).

    As recently as 2004 they lost money, and their top line revenue is only up about 5% total since then. They just bought Weyerhaeuser's containerboard division which should improve the top line, but if the dollar turns, the benefits from the acquisition would otherwise be limited to 'synergy' and 'further economies of scale' from what was already two very big containerboard producers.

    fake disclosure: 'synergy' and 'economies of scale' in pulp and paper are very similiar to 'goodwill' and 'intangible assets' on a balance sheet.
    May 06 08:36 am |Rating: 0 0 |Link to Comment |View article

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