International Paper Fell 10.6%, a Three-Year Low
The Price of Oil Fell Again, and SPY Fell with It
Paper and packaging companies downgraded
The following table presents the paper manufacturing stocks along with their beta and moving averages.
Below are the yields of these stocks as of January 25, 2016:
International Paper (IP): -10.6%
Avery Dennison (AVY): -4.3%
Sealed Air (SEE): -4.9%
MeadWestvaco (MWV): -0.8%
The materials sector is already battered by the rout in commodity prices. The latest to join raw materials is packaging paper and container material. The demand for these is falling due to the business cycle and the slowdown in its economic activity. Thus, analysts at Citigroup (C) and Macquarie Capital have downgraded these paper and container manufacturing companies, citing low demand.
Technical snapshot
The value of beta of the above stocks is around 1, implying that the stocks move in tandem with the market movement.
The trailing one-year return of International Paper (IP) is the lowest with a yield of -39.7%.
All these stocks traded at a price well below their respective 100-day, 50-day, and 20-day moving averages, implying the downward trend in the stock price movement.
The average value of the RSI (relative strength index) of these stocks is 44. This suggests that these stocks are neither overvalued nor oversold.
When compared to the analysts’ stock price target, these stocks have an upside potential of 33%.
On average, these stocks have seven “buy,” seven “hold,” and one “sell” recommendations.
Finance sector
Stocks of many investment banks and lending banks fell on Monday, January 25, fearing the banks’ risk of exposure to the oil- and gas-related companies. These stocks include Bank of America (BAC), Goldman Sachs (GS), JPMorgan Chase (JPM), and Morgan Stanley (MS), which fell 4.4%, 3.7%, 2.3%, and 2.5%, respectively, on January 25.
Let’s look next at the key stocks of the SPDR S&P 500 ETF (SPY) as of January 25, 2016.
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