Good afternoon. Not much point in responding to NewsTraders, which is simply disseminating information, so I'm addressing this response to you because you appear interested in the company.
I should not get too excited by Edmond Safra's (please note correct spelling of the man's name) purchases. He is a very savvy investor, agreed; but his purchases may reflect an industry call rather than a vote for the specific company.
Keep in mind that one *usually* wants to buy the paper and forest products stocks, as is the case for the shares of many commodity-oriented companies, when earnings are going into the tank and there is no sign of daylight. IP, as I have noted in a previous entry, is the flagship for the group. If one does not profess any special expertise in analyzing these companies, one selects the flagship, which is what Mr. Safra may be doing.
On its own merits, aside from industry appeal, IP is not particularly attractive. The restructuring that John Dillon et al. appear to be executing is not nearly sufficiently draconian to refocus it enough to achieve acceptable returns on investment and equity. This company has been out of control for too long. Far more is needed to make this stock attractive in its own right.
However, as suggested earlier, this may be the time to move on this group and IP is a relatively safe bet if the group call is correct. One thing to keep in mind, however, is that we *may* be facing a recession in which there is deflation. Deflation slaughters commodity prices. A thought to keep in mind. |
