Buoyed by improved second-quarter 2014 results, shares of
Clearwater Paper Corporation
) scaled a 52-week high of $70.16 during Friday's trading session,
before closing at $68.38. This translates to a healthy year-to-date
return of 43.3%.
Clearwater Paper's share price has been on an uptrend since it
reported the second quarter results. Despite its price
appreciation, Clearwater Paper still has the wherewithal for the
stock to climb up. The stock is currently trading at a forward P/E
of 18.5x and has long-term earnings growth expectation of 5.0%.
Clearwater Paper reported quarterly sales of $498.8 million - up
5.9% year over year with record TAD (through-air-dried) product
sales, driven by strong customer momentum and continued demand for
paperboard products. Anchored by continued success in the core
businesses and healthy progress in niche market areas, GAAP
earnings also improved year over year.
Adjusted earnings of 74 cents per share comfortably beat the Zacks
Consensus Estimate by 6 cents and the year-ago tally by 23 cents.
Adjusted EBITDA for the quarter was up 8.4% to $57.3 million.
Clearwater Paper looks well positioned to capitalize on
opportunities in growing markets through both organic and inorganic
means. With a strong balance sheet, healthy cash flow and effective
management, the company appears poised to exploit value-added
opportunities to bolster its prospects.
The solid fundamentals also find confirmation in positive estimate
changes, driving the Zacks Consensus Estimate higher for both the
current quarter as well as the year. The Zacks Consensus Estimates
for the ongoing quarter and year are currently pegged at $1.16 and
$3.69, respectively, representing 314.3% and 101.6% year-over-year
Other Stocks to Consider
Clearwater Paper currently has a Zacks Rank #3 (Hold). Other
players in the industry worth mentioning include Neenah Paper, Inc.
), Orchids Paper Products Co. (
) and Mercer International Inc. (
), each carrying a Zacks Rank #2 (Buy).
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