Fire at KapStone Longview Paper Mill - Analyst Blog

A minor fire recently broke out at the Longview manufacturing facility of paper and paper products manufacturer KapStone Paper and Packaging Corporation KS. The fire was promptly extinguished, resulting in zero casualties. Normal production schedule was also restored after a brief interruption. However, the fire clamed properties worth less than $10,000.

KapStone primarily manufactures containerboard, corrugated products and specialty paper products. It is the largest producer of kraft paper in the U.S. which is utilized for making bags for agricultural products, pet food, baking products, cement and chemicals, and grocery bags. Despite a pan-American presence, the company largely focuses on the regional markets, operating 4 paper mills and 22 converting plants in the U.S.

The shares of this Zacks Rank #2 (Buy) stock have currently been on a downhill after retaining a steady uptrend for around nine months from June 2013. The shares are currently trading at $24.74 as on April 15, 2014, which translates to a healthy year-over-year return of 75.7%.

The stock is currently trading at a forward P/E of 11.0x and is likely to continue the momentum in the near future, albeit at a comparatively reduced pace, with long-term earnings growth expectation of 5.0%.

KapStone is slated to report its first-quarter 2014 results after the market closes on April 30. The Zacks Consensus Estimate for the soon-to-be-reported quarter is pegged at 44 cents, which represents a stellar 125.6% growth compared to the year-ago quarter.

Other well-performing stocks in the industry that warrant a look include Neenah Paper, Inc. NP, Domtar Corporation UFS and Svenska Cellulosa Aktiebolaget SCA (publ) (SVCBY). While Neenah sports a Zacks Rank #1 (Strong Buy), Domtar and Svenska both carry a Zacks Rank #2 (Buy) each.