ABH a Forest Fire?

From SmallCap Network:

Pulp or Paper Stocks: A Forest Fire Risk To Your Portfolio? AbitibiBowater (ABH), Mercer International (MERC) & Domtar Corp. (UFS)

A closer look at pulp and paper stocks AbitibiBowater (ABH), Mercer International (MERC) and Domtar Corp. (UFS) that were active in the last trading session.

By John Udovich

May 24, 2012 5:47:55 AM PDT | No Comment(s) - Post a CommentRating

StockHQ:

• ABH

   $0.00 $0.00 0.00%
 

• UFS

   $79.15 +$0.52 +0.66%
 

• MERC

   $6.35 -$0.07 -1.09%

JOHN UDOVICH

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On Wednesday, pulp or paper stocks AbitibiBowater (NYSE: ABH),Mercer International (NASDAQ: MERC) and Domtar Corp. (NYSE: UFS) were fairly active. Specifically, AbitibiBowater (ABH) announced a share repurchase program while Mercer International (MERC) and Domtar Corp. (UFS) both produced charts that would grab the attention of chart technicians. However, will these three pulp or paper stocks cause a fire in your portfolio? Here is a closer look to help you decide:

AbitibiBowater (NYSE: ABH) Surged After Announcing a Share Repurchase Agreement

AbitibiBowater makes paper and wood products and it should be noted that the company has just officially changed its name to Resolute Forest Products and will soon trade under the ticker RFP. On Wednesday, AbitibiBowater surged 11.92% to $11.83 (ABH has a 52 week trading range of $10.15 to $25.04 a share) for a market cap of $1.17 billion but the stock is down 18.7% since the start of the year, down 52.3% over the past year and down 69.8% over the past five years. The reason for the surge was the announcement that AbitibiBowater has authorized the repurchase of up to 10% of the company's common stock for an aggregate purchase price of up to US$100 million. On the other hand, investors should remember that AbitibiBowater’s has reported a 23% drop in its quarterly profit because all of its segments (e.g. newsprint, paper, pulp and wood products) reported weak results and it pays no dividend. In addition, its worth noting the following bottom line results from AbitibiBowater for the past four years:

• $41M (2011)
• $2,614M (2010)
• -$1,553M (2009)
• -$2,234M (2008)

Hence, investors might want to contain their excitement AbitibiBowater and its share repurchase plan.