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Nice article, Eric. I left my comments there.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
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I recently added IP to my tracking list. Will likely add at some point.
Alex
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I bought IP last year because it looked good on paper (no pun intended), and because MCD is starting to transition away from styrafoam cups and into paper, which I hope is a secular trend.
Then I decided to do more due diligence and read the morningstar and S&P reports, and the investor presentation (which doesn't mention anything about MCD's cups), and I couldn't figure out where the high EPS growth estimate comes from. The top line growth is very slim and the difference between the top and bottom line estimate is too wide for me to believe that it will come from margin expansion. The bull case says that cardboard boxes are going to be the new brick & mortar as everyone has everything shipped, but I consider that speculation. There's also the secular headwind of digitization. Eventually I decided I don't have enough conviction, and I sold it for a small profit.
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I have to admit, I don't really understand the secular trend on why so many paper companies are doing good, but looking at IP, RKT, KS, TIS there seems to be an upward trend in the sector.
