We like these new pure-play stocks

Article Excerpt

As we often remind our readers, spinoffs are a great way for out-of-favour companies to boost shareholder value. International Paper is key example. While the shutdown of schools due to COVID-19 hurt demand for writing and printing paper, the pandemic also increased demand for its cardboard packaging as more people began to order goods online. The company now plans to spin off its printing paper business as a separate firm called Sylvamo. That will let the former parent focus on cardboard packaging. Investors prefer pure-play firms as they’re easier to evaluate, and we expect both companies to benefit from the split. INTERNATIONAL PAPER CO. $58 is a spinoff buy. The company (New York symbol IP, Manufacturing & Industry sector; Shares outstanding: 390.8 million; Market cap: $22.7 billion; Dividend yield: 3.5%; Takeover Target Rating: Medium; www.internationalpaper.com) began operating in 1898 and is now a global provider of fibre-based packaging and pulp and paper products. It has manufacturing facilities in North America, Latin America, Europe, North…