Over the last five years, International Paper (IP - Get Report) has turned itself into the most important container board company in the world. It did it in the nick of time because e-commerce is about shipping things that normally would be thrown into a bag at the store.
Now they're most likely to be thrown into a linerboard package that would be most likely made by IP, at least when the Temple Inland (TIN) deal closes.
Everyone is worried about this company and the potential collapse of world trade if Europe goes bad. Instead they should be looking at what will happen when the lowest cost producer of a commodity suddenly gets an uptick in sales and what that does to the bottom line. That's where we are now with IP, as it is by far the lowest cost producer and its numbers factor in about a 1% growth in the business. No more than that.
If we do see any pickup, a monstrous amount of that money will fall to the bottom line. In the interim, you are being paid to wait with a hefty yield and earnings estimates that I believe will have no problem being met.Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.
Slick Plays for This Market Posted at 6:43 p.m. EDT on Monday, Dec. 5. You know you have a strong oil market when Transocean (RIG - Get Report) makes you more than 10% in an equity offering in no time flat. Last week, the most disgraced and scorned oil service company, RIG, priced 26 million shares at $40.50, an unthinkable sale given how much stock RIG has bought back at much higher prices. Today, though, Transocean traded as high as $45.50, a remarkable move that shows the power of this rally in oil. I think that it is lasting. Two of my favorites are Clean Harbors (CLH - Get Report), which is the best fracking cleanup play, and Core Labs (CLB - Get Report), the quintessential oil technology company with instruments that can tell you what's underneath better than just about anyone. But CLH and CLB are truly the exceptions. The oil service industry index is at $126, down $40 from its high even as oil is very near its high. That's pretty nutty as these companies are having a terrific time. I am surprised there haven't been more BJ Services (BJS)/ Smith International-like deals given how compelling the long-term stories are turning out to be.