Editor's Note

When insiders buy their own stock that is normally a good indication of things to come. For KapStone Paper and Packaging, director Robert Bahash bought 20,000 shares to increases his stake to 27,000 shares. Basically he bought three times what he already owned and he is just a director. Hedge fund DE Shaw reported a 2.35 million share stake in their latest 13F.


KS - KapStone Paper - Company Profile

KapStone manufactures and sells containerboard, corrugated Products and specialty paper products in the U.S. and internationally. They are the 5th largest producer in the USA. The purchased Victory Packaging L.P. and its subsidiaries for $615 million back in June. As a result of the acquisition revenue for 2015 rose from $2.3 billion to $2.8 billion thanks to $582.9 million in revenue from Victory.

They own four paper mills, 21 plants and 65 distribution centers.

Earnings were a challenge for Q4 due to a 12-day strike at one of their paper mills. This reduced revenue because of a lack of product. Shares dropped from $14 to $9 on the news on February 10th. Shares have recovered from that dip and were up 70 cents on Thursday in a weak market. They failed to sell off earlier in the week when the market was down.

On March 10th they announced a 10 cent quarterly dividend payable April 13th to holders on March 30th. Earnings are May 2nd.

Shares are in a pretty decent uptrend and closed at $13.20 on Thursday. Resistance is $15.20. The high in November was $25. I believe they will at least reach resistance at $15 and with a decent market will move through that level to $17.

Buy KS shares, currently $13.20, initial stop loss $11.30

No option because of wide strikes.


No New Bearish Plays