Top Stock to Buy #5 – Rock-Tenn (RKT)
Rock-Tenn (RKT) is one of the largest producers of corrugated medium, linerboard, paperboard and merchandising displays with operations in the U.S., Canada, Mexico, Chile, Argentina and China.
It is the clear leader in its industry with earnings that have crushed estimates for each of the past four quarters. When it released fiscal Q3 results in July, it exceeded estimates by 30%, reporting earnings of $2.16 per share versus an expected $1.67. Management stated, “A performance-based, data-driven culture also helps us continuously reduce costs and increase customer satisfaction.” S&P estimates earnings for full-year fiscal 2013, ended in September, will be $7 per share, up from $4.48 the prior year, and $9.50 for fiscal 2014.
This stock has been trading in a powerful and predictable bull channel since December, rising over 75%. Recent profit-taking and a weak stock market have dropped it from its August high of over $118 to just above its 50-day moving average. Buy RKT at $115 or lower for a trading objective of $125. Long-term buyers could reap a much larger reward from this mid-cap gem.