International Paper Company (IP): Billionaire Dan Loeb Is Making Paper

Hedge fund trade

Of the major peers, International Paper Company (NYSE:IP) had the maximum hedge fund interest going into 2013, with a total of 38 hedge funds long the stock. The top hedge fund owner by market value was Doug Silverman’s Senator Investment Group, with a $139 million position (check out Senator’s top picks).

Heading into 2013, there were 20 hedge funds long the stock. First Eagle Investment Management was the top fund owner with $165 million invested in the stock, which was a mere 0.6% of its portfolio. (see Packaging Corp’s other hedgie owners). For Clearwater, there were only 10 hedge funds long the stock, which does include a couple of big name hedge funds. Royce & Associates was the top hedge fund owner, while billionaire Steve Cohen was second with a $64 million position (check out Cohen’s small cap picks).

Don’t be fooled

International Paper appears to be very cheap. The company trades below major peers on a price to sales and a forward P/E basis.

What’s more is that when you couple the expected growth of International Paper Company (NYSE:IP) with its cheap valuation, the stock is easily a growth at a reasonable price opportunity, with a PEG ratio of 0.77, compared to Packaging Corp’s 1.4 and Clearwater Paper Corp (NYSE:CLW)’s 1.22. Oh, and the company also pays a dividend that yields 2.60%.

Loeb took a position in International Paper Company (NYSE:IP) during the first quarter of this year, and although he might not be happy about the earnings miss, the company is a cash flow story going forward. This sell-off is a great opportunity for new shareholders to take a position and buy the dip in International Paper.

The article Billionaire Dan Loeb Is Making Paper originally appeared on Fool.com and is written by Marshall Hargrave.

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