We recently published a list of 10 Best Paper Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Weyerhaeuser Company (NYSE:WY) stands against other best paper stocks to buy according to hedge funds.
Paper stocks encompass producers of paper, pulp, packaging products, toilet paper, and forestry operators. This sector typically thrives during periods of economic expansion when consumer spending, ecommerce activity, and industrial production are accelerating, driving higher demand for commercial packaging and consumer paper products. The performance of paper stocks strongly correlates with commodity prices of pulp and timber, as well as with the price of energy and freight, which are large cost inputs in the production chain. Consequently, paper-related stocks generally thrive in inflationary environments due to their pricing power, as producers can easily pass any inflation onto consumers and capture a margin of the price increase. Conversely, these stocks underperform during economic slowdowns as consumer demand and industrial activity fall, and lower commodity prices pressure profitability.
Some investors avoid this sector as they mistakenly consider it low growth and disrupted. Their perception is based on a tough 2010s decade marked by several challenges that pressured growth. Here is how AFRY Advisory commented on the paper market:
“With the universal move to digital communication, the demand for print has been on a steep decline, triggering massive shutdowns in the graphic paper sector and sizeable entries in the packaging board market through conversions and grade changes from graphics to packaging grades. The worldwide COVID-19 pandemic deepened the paper markets’ decline as decreasing economic activity and lockdowns further contracted the demand for graphics and office papers, while hygiene and corrugated packaging businesses recovered more effectively.”
READ ALSO: 10 Best Lumber Stocks To Buy Right Now
The struggles of the paper & paper products sector, as proxied by a timber ETF that includes many paper companies as well, extended into the 2020s. In early 2025, just before the US stock market entered correction mode, the sector reached a new all-time low relative to the broad market. Another global timber and wood ETF shows a similar picture – years of underperformance relative to the broad market, which killed most of the investor interest in this sector. Despite sluggish performance in the last years, we believe that the underfollowed paper sector may become favored in the following years due to a plethora of factors triggered by the new Trump 2.0 administration in the US.
First, we already know that paper stocks thrive during inflationary periods, and the US appears to have entered a multi-year period of above-average inflation due to the trade wars initiated by President Trump. Many of the paper companies have operations spanning several continents, with cultivation, processing, and selling often happening in two or three different countries, which means that the production chain may become subject to tariffs. Under such circumstances, paper companies will fully pass any inflationary pressures onto the end customer, meaning that they would capture a higher margin in absolute dollar value. The hypothesis of higher inflation in the US is fully supported by the 10-year US treasury yield climbing to 4.58% on April 11, significantly above the second half of 2024.
Second, the current US administration is a notorious proponent of onshoring, which means a partial or full return of manufacturing activity into the US. Paper stocks are positively correlated to the level of industrial and commerce activity in the US and could benefit from the accelerating demand for paper used in industrial and commercial packaging. In fact, the onshoring trend is already happening as several corporations, from semiconductors to automobile manufacturers and other consumer discretionary businesses, announced plans to boost their manufacturing presence in the US.
Our Methodology
We used a stock screener and thematic ETFs to identify companies engaged in the production of pulp, toilet paper, newspapers, cardboard, forest, and other paper-related products. Then we compared the list with Insider Monkey’s proprietary database of hedge funds’ ownership and included in the article the top 10 stocks with the largest number of hedge funds that own the stock as of Q4 2024. The stocks are ranked in ascending order of the hedge funds having stakes in them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A wide shot of lush green forestry surrounding a timber harvesting facility.
Weyerhaeuser Company (NYSE:WY)
Number of Hedge Fund Holders: 37
Weyerhaeuser Company (NYSE:WY) is a US-based REIT and one of the largest private owners of timberlands in North America, managing approximately 10.4 million acres in the US alone and additional lands in Canada under long-term licenses. The company’s Timberlands segment focuses on sustainable forest management, including the harvesting and sale of logs for domestic and export markets. The Wood Products segment manufactures structural lumber, strand board, and engineered wood products and distributes building materials for both residential and commercial construction.
Weyerhaeuser Company (NYSE:WY) reported full-year 2024 GAAP earnings of $0.54 per diluted share on net sales of $7.1 billion, with adjusted EBITDA totaling $1.3 billion for the year. Despite challenging market conditions, the company made significant progress across multiple strategic initiatives, including growing Timberlands through acquisitions in Alabama, announcing plans to expand the engineered wood products portfolio, advancing the Natural Climate Solutions business, and capturing operational excellence improvements. The company returned $735 million to shareholders in 2024, including $153 million in share repurchases, while also increasing the base dividend by more than 5%.
A major strategic development for Weyerhaeuser Company (NYSE:WY) was the announcement of a $500 million investment to build a state-of-the-art facility in Arkansas, which is expected to generate over $100 million of annual adjusted EBITDA once fully operational. The Natural Climate Solutions business showed strong growth, with full-year adjusted EBITDA reaching $84 million, a 79% increase compared to 2023, and remains on track to reach $100 million of adjusted EBITDA by the end of 2025. The company demonstrated the durability of its portfolio and the flexibility of its capital allocation framework across market cycles, maintaining strong financial performance despite what was described as the most challenging lumber market in about 15 years. The large projects planned represent a great opportunity for WY to capitalize on a potential market recovery, which makes it one of the best paper stocks to buy now.
Overall, WY ranks 4th on our list of best paper stocks to buy according to hedge funds. While we acknowledge the potential of WY to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than WY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.