Shares of paper and paper products manufacturer
Resolute Forest Products Inc.
) scaled a 52-week high of $21.59 on Feb 21, before closing the
trading session nominally lower at $21.45 for a healthy
year-over-year return of 61.8%. Resolute Forest Products' share
prices have steadily been on the uptrend from Dec 2013.
CLEARWATER PAPR (CLW): Free Stock Analysis
FIBRIA CELULOSE (FBR): Free Stock Analysis
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RESOLUTE FOREST (RFP): Free Stock Analysis
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This Zacks Rank #1 (Strong Buy) stock is currently trading at a
forward P/E of 17.3x and is likely to continue the growth
momentum in the near future.
Resolute Forest Products reported strong fourth quarter 2013
results as both revenues and adjusted earnings increased year
over year. Excluding non-recurring items, adjusted earnings for
the reported quarter were 34 cents per share compared with 30
cents in the year-ago quarter. Revenues for the quarter increased
2% year over year to $1,150 million as the network ran at near
capacity maintaining solid production levels.
Despite headwinds from higher-than-expected maintenance costs,
higher overall fiber costs and increased fuel costs, the company
was able to lower overall manufacturing costs by over $30 million
in 2013. This was achieved through asset optimization, mill
restructuring initiatives and increased external power sales from
Moving ahead, Resolute Forest Products expects to maintain stable
newsprint volume in the first quarter of 2014 leveraging on its
operating scale, financial strength and low-cost operating
platform. The company also expects lumber pricing and shipments
to remain steady based on the positive momentum of U.S. housing
starts, despite costs remaining under pressure due to lower wood
allocation and harsh winter conditions.
Over the last 30 days, Resolute Forest Products' earnings
estimates for fiscal 2014 climbed higher on expectations of a
solid earnings momentum. We also envision an uptrend for the
stock backed by its strong growth potential.
Other Stocks to Consider
Stocks in the industry that warrant a look include
Clearwater Paper Corporation
Fibria Celulose SA
), each of which carry a Zacks Rank #2 (Buy).