Rock-Tenn (RKT) Stock Closed Down Following New Tax Rule Proposal

NEW YORK (TheStreet) -- Shares of Rock-Tenn Co  (RKT) closed down 2.37% to $61.68 on heavy volume in Tuesday's trading session, after the IRS proposed a new tax rule for packaging companies.

Under the new rule, processing of timber includes making sawdust, untreated lumber and woodchips. This would make the tax break unavailable after chemicals or foreign substances are added and it's turned into paper, pulp and plywood, Bloomberg reports.

Packaging companies will not be able to separate their containerboard operations into tax-advantaged vehicles, Bloomberg added.

Similarly, International Paper (IP) stock closed down 5.19% to $50.95 in today's regular session.

About 4.9 million shares of Rock-Tenn exchanged hands as of 4:02 p.m. ET today, compared to its average daily volume of about 1.35 million shares.

Norcross, GA-based Rock-Tenn is an integrated manufacturer of corrugated and consumer packaging. 

Separately, TheStreet Ratings team rates ROCK-TENN CO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ROCK-TENN CO (RKT) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, increase in net income, reasonable valuation levels and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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