Rock-Tenn (RKT) — This company 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.
The stock was included on my Top 6 Stocks to Buy for September list because it is the clear leader in its industry with earnings that have crushed estimates for each of the past four quarters.
When the company 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.”
The consensus estimate for the full 2013 fiscal year, ended in September, is $7.12 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 around75%. 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 at $111.
Buy RKT at the market with a trading objective of $125. Long-term buyers could reap a much larger reward from this mid-cap gem.