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VOL. 123 | NO. 221 | Tuesday, November 11, 2008

Sector Snap: Paper and Forest Products Companies

AP

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NEW YORK (AP) - Shares of paper and forest product companies fell Monday after an analyst said he expected weakening demand, lower prices and diminished earnings in the sector.

Goldman Sachs analyst Richard Skidmore said in a client note that there "is increasing concern about ability to hold prices in (the first half of next year) given the pace of demand declines."

He also forecast that prices would move lower in the first six months of next year as operating rates follow prices down.

"Despite the stocks falling 55 percent year-to-date and underperforming the S&P 500 by (1.6 percent), we see further downside to the stocks as the cycle rolls over," wrote Skidmore, who has no "Buy" ratings on any company he covers in the sector.

However, for investors seeking exposure to the paper and forest products industry, he suggested Packaging Corp. of America "because of its low cost position, strong balance sheet, and 7 percent dividend yield."

Potlatch Corp. fell $3.08, or 9.7 percent, to $28.71, International Paper Co. declined 98 cents, or 6.6 percent, to $13.90, Packaging Corp. of America decreased $1.40, or 9.1 percent, to $13.94, Smurfit-Stone Container Corp. lost 21 cents, or 18 percent, to 96 cents, and Temple-Inland Inc. fell 29 cents, or 5.3 percent to $5.20.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 70 134 16,547
MORTGAGES 72 144 21,576
FORECLOSURE NOTICES 9 35 4,301
BUILDING PERMITS 209 209 39,587
BANKRUPTCIES 80 149 15,691
BUSINESS LICENSES 15 28 5,519
UTILITY CONNECTIONS 117 201 23,774
MARRIAGE LICENSES 14 51 5,086

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