Rock-Tenn (RKT)
is a fairly well-respected company in the paper packaging industry, but
the company has struggled to generate appreciably better returns on
capital over time. I suspect that is at least part of the reason that
the company has lagged both International Paper (IP) and Packaging Corp (PKG) over the long term and other players like Graphic Packaging (GPK) and MeadWestvaco (MWV) more recently.
The
company took on a big operational challenge (and a lot of debt) when it
acquired Smurfit-Stone at a generous price in 2011, but the company has
likely not maxxed out the potential synergies and operational
improvements here. I do have some concerns about the near-term health of
the corrugated and containerboard markets, but it looks as though the
shares already factor in a fair bit of that risk.
Read the full article here:
Smart Deals And Smurfit Synergies Can Still Help Rock-Tenn
No comments:
Post a Comment