Japanese Pulp and Paper Stocks

The 14 Japanese pulp and paper companies presented here (table) give investors the opportunity to invest in the Japanese and Southeast Asian economies. The pulp and paper industry is extremely cyclical so the stock prices of these companies will rise and fall with fluctuating business cycles. More...

Votorantim Celulose e Papel Has Rewarded Its Investors But Be Careful

Votorantim Celulose e Papel (VCP), a Brazilian pulp and paper company, is not a household name in the U.S., but the stock has made lots of money for its investors. Since October 2002 VCP has increased almost 700 percent. And it pays a healthy dividend yield of over two percent.

Currently CP is down from its all-time high after completing three upside phases. And the stock may have more downside before stabilizing. So carefully watch VCP before you buy it. Like most pulp and paper stocks, VCP is very cyclical so buy it at the beginning of a price cycle, not near the end of one.

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Wood Products, Paper Products and Timber Management Stocks

Wood Products, Paper Products and Timber Management Stocks

Forest products (lumber, oriented stand board, plywood and more), pulp and paper and timberland management companies (real estate investment trusts and limited partnerships) give investors the opportunity to realize capital gains and receive income from dividends and other cash distributions. Forestry-related companies produce products that are always in demand and owning stocks in these companies lets investors benefit from a growing world economy.

These companies have cyclical businesses so their stock price follow a cyclical pattern. Often their cycles do not correspond to the cycles of other economic sectors, so forestry stocks can act to even out the performance of a stock portfolio.

Many of these companies pay safe dividends so their stocks are appropriate holdings in a long-term dividend reinvestment portfolio.

Click here for a comprehensive list of forestry-related companies.

For lists of the largest forestry-related companies see S&P Global Timber & Forestry Index Tracks 25 Forestry-Related Companies and World Timber Index (TIMBEX) Tracks Timber, Forest Products and Paper Stocks.

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S&P Global Timber & Forestry Index Tracks 25 Forestry-Related Companies

The S&P Global Timber & Forestry Index includes 25 of the largest publicly-traded companies engaged in the ownership and management of forests and timberlands. These companies produce forest products, paper products companies and manage timberland.

Click here to see the components in the index.

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World Timber Index (TIMBEX) Tracks Timber, Forest Products and Paper Stocks

World Timber Index (TIMBEX) Tracks Timber, Forest Products and Paper Stocks

The World Timber index (TIMBEX) by Dow Jones Indexes includes the 15 largest (market cap exceeds $500 million) liquid forestry-related stocks that are engaged in producing wood products, pulp and paper products or forest land ownership (REITs). TIMBEX is market-cap weighted with no one component exceeding ten percent.

The index is useful to investors because the components are established companies with capital gains potential. And many of them pay safe increasing dividends.

But the lumber and pulp and paper industries are cyclical and so are the stock prices of forestry-related companies. So before you buy any of these stocks, be sure to study their price charts. Always buy at the beginning of price upside and avoid buying at the cyclical tops. And avoid buying on the downside of the price cycle.

Click here to see a table of the TIMBEX components.

For more information about the TIMBEX see TIMBEX current components by weightings (.pdf file) and TIMBEX brochure (.pdf file).

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Sino-Forest Is a China Play

Sino-Forest (SNOFF.PK), a Canadian and Hong Kong-based company that has forestry operations in China, has rewarded its shareholders. The stock has had three upside phases since 2006 yielding a five-fold increase in its price.

The company owns forest plantations from which it cuts tress for China’s pulp and paper, furniture, construction and interior decoration industries.

Like many Chinese stocks, Sino-Forest has experienced an extended price appreciation so be careful with it.

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