This Boxmaker Didn't Get Pulped

摘要

Investors in the beleaguered paper industry got another jolt on Feb. 18 when the CEO of International Paper told Bloomberg his company might cut dividends. Shares of many companies in the debt-heavy sector have been hit by plummeting demand and the Jan. 26 bankruptcy fil-ing of papermaker Smurfit-Stone Container. Lee Eugene Munson, chief investment officerrnat money manager Portfolio in Albuquerque, says International Paper isn't a buy despite its 80% drop in the past year. He prefers Packaging Corp. of America, one of the largest makers of cardboard boxes. Packaging was one of the only paper companies to report fourth-quarter profits, owing to superior management, Munson says. It has been cutting costs to offset falling demand while building up cash on its balance sheet. And Packaging has no debt coming due for the next five years, a cushion its troubled competitors lack. "It's the best defensive play in the industry," Munson says.