josemoraes/E+ via Getty Images
Introduction
International Paper Company (NYSE:IP) has been quite active in the last few months since the last time I covered it. This is mainly because its share price has outperformed the market by a
International Paper Stock: Not Trading On Fundamentals
Summary
- International Paper Company's recent share price surge is driven by takeover speculation, not fundamentals, making it an unattractive investment currently.
- Financial performance has been lackluster with unimpressive revenue growth and tight margins, despite a temporary tax benefit boosting the bottom line.
- The company's high debt and modest interest coverage ratio add financial risk.
- The takeover drama adds volatility, and without clear efficiency improvements, I remain cautious and on the sidelines.
MSc in Finance. Long-term horizon investor mostly with 5-10 year horizon. I like to keep investing simple. I believe a portfolio should consist of a mix of growth, value, and dividend-paying stocks but usually end up looking for value more than anything. I also sell options from time to time.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.