The Investment Column: Jefferson Smurfit
Thursday 02 September 1999
Smurfit's fortunes are dependent on containerboard prices, the main component of brown cardboard boxes. These were weak in the first quarter, although prices of linerboard, Smurfit's main product that forms the outer layer of boxes, have risen this year.
Throughout the 1990s an imbalance of supply and demand dogged the packaging industry and forced down the ratings of shares in sector. But Smurfit investors have been betting that packaging producers will be able to implement more price hikes following moves by the main players in the industry to cull their capacity and streamline operations.
Indications are that a punt on continued recovery in Smurfit's shares is justified. The supply of linerboard has been curtailed, with production cut back by 2m tons in the US this year. Half of that reduction was made by Smurfit-Stone Container Corp, Smurfit's US associate in which it has a 34 per cent stake. Demand is also picking up in the US and Asia. Meanwhile, the merger between Jefferson Smurfit's US division and Stone Container Company that formed SSCC last year has produced annual cost savings of $220m.
The stockbroker Goodbody expects full-year pre-tax profits of 105.9m euros, with an earnings per share of 6.3c rising to 413.7m euros and 26.2c in 2001. On five times forecast earnings in 2001, the shares, at 189p, are good value.
- 2 Top Gear: Jodie Kidd, Philip Glenister and Guy Martin 'in advanced talks' to join show
- 3 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 4 University student in court for allegedly covering housemates' food in window cleaner and spit
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
University student in court for allegedly covering housemates' food in window cleaner and spit
Garland shooting: Isis claims attack on Prophet Mohamed cartoon contest in Texas as its first action on US soil
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
In defence of liberal democracy
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
Andy McSmith's Sketch: Feisty audience is the real star of an enlightening show
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...