An inside-the-box holiday stock
International Paper has turned itself into the most important container board company in the world -- just as e-commerce has exploded.
How about a lower-risk play on all of that online shipping? How about the company that makes the boxes for the goods that come in the mail this season?
Over the last five years, International Paper (IP) has turned itself into the most important container board company in the world. It did so in the nick of time because e-commerce is about shipping things that would normally be thrown into a bag at the store. Now those same products are more than likely to end up in a linerboard package that would very likely be made by IP, at least once the Temple Inland (TIN) deal closes.
Everyone is worried about this company and the potential collapse of world trade if Europe goes bad. Instead they should be looking at what will happen when the lowest cost producer of a commodity suddenly gets an uptick in sales, and what that does to the bottom line.
That's where we are now with IP, as it is by far the lowest-cost producer and its numbers factor in about a 1% growth in the business. No more than that.
If we do see any pickup, a monstrous amount of that money will fall to the bottom line. In the interim, you are being paid to wait with a hefty 3.7% yield and earnings estimates that I believe it will have no problem meeting.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.
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Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for his charitable trust.
Jimmy, you are the dump on the news guy , thanks for being schizophrenic , it's really easy to make a buck off you, with that red nose and oversized shoes, hey, let that fringe of hair grow a little longer, and you can be Bobo the Clown, in looks and actions . slip and fall , but make a buck doing it . Bet against , what you say ,go jimmy go., hasta nunca
CLUE FOR CLOWN MAN..........4 PERCENT YIELD DOES NOT PROTECT YOU FROM
A GAP DOWN ...............IF A PERSON MUST BUY AN INDIVIDUAL STOCK WITH ALL
OF ITS IMPOSSIBLE TO KNOW RISKS IT SHOULD BE PROPERLY HEDGED WITH
OPTIONS ...........YOUR STRATEGY OF LOSING LESS WITH HIGH YIELDERS IS STILL
LOSING.........SHOULDN'T THE GOAL BE TO WIN WHETHER LONG OR SHORT?
Regardless of what people think of Cramer or the quality of his advice, it's good to see him and others start to push investment in second and third tier Internet companies. Why is it that only Silicon Valley investors understand that the Web and all its iterations are where the growth is? Just because the investment analytics and algorithms don't fit traditional analysis doesn't mean we shouldn't be encouraging all those investors who have some $9 trillion tucked in their mattresses to get involved. The sooner...and the bigger...the better.
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