International Paper (IP)

If you’re trying to win your class stock market game, you’re probably searching for the top stocks to buy now. Well, let’s talk about a sleeper pick that could help you crush the competition: International Paper. This company might not sound as flashy as Tesla or Apple, but its stock is positioned for a potential comeback that could score you big points in your game. And in the world of high-risk, high-reward strategies, International Paper is a prime example of how you can use momentum trading to win.

Here’s the backstory. During the pandemic, everyone was buying stuff online, which means tons of boxes were needed to ship all that stuff—enter International Paper. Their business is all about making those boxes, and their sales and stock price skyrocketed. But when people started going back to restaurants and vacations, that box-buying frenzy cooled off, leaving retailers with more packaging than they needed. That overstock sent International Paper’s stock tumbling, now down 43% from its peak in 2021.

Now, here’s where it gets interesting. “International Paper is a classic case of a pandemic boom stock waiting for its second wind,” says stock market analyst Chris Reynolds. Inventory levels are stabilizing, and demand for packaging could be set for a bounce. Retailers and manufacturers are reporting that their inventories are now closer to target levels, which means they might need to restock soon. And when they do, it could cause a surge in sales for International Paper.

For your class stock market game, a stock like International Paper offers the perfect mix of risk and reward. It’s trading lower than it has in years, meaning you could buy it cheap, and if the market starts moving in the right direction, the stock could shoot up quickly. That’s how momentum trading works: buying a stock when it’s low and riding the wave as it climbs. Just make sure you understand that this kind of strategy is all about the short term. It’s high-risk, high-reward, which can help you win a stock market game but isn’t the smartest move for long-term investing.

In the real world, building financial wealth is more about playing it safe with a diversified portfolio. Diversification means spreading your money across different types of investments so you’re not too dependent on any one stock, like International Paper. A good example of diversification is an S&P 500 index fund, which includes 500 of the biggest companies in the U.S. It’s like putting your eggs in 500 baskets instead of just one.

But back to the game. Right now, International Paper is trading about 16% lower than its average price in 2019, which means there’s room for a potential bounce. E-commerce sales are still strong compared to pre-pandemic levels, with online shopping now making up 15.4% of all retail sales, compared to just 11.2% before the pandemic. That’s a sign that people haven’t gone back to their old habits—they’re still buying stuff online, and that means more boxes. Plus, economists think inventory rebuilding could add a full percentage point to GDP growth in the next quarter, giving companies like International Paper a boost.

“Inventory rebuilds can trigger what we call the ‘bullwhip effect,’ where small increases in demand can lead to massive increases in sales for companies supplying those goods,” says investment strategist Sarah Mitchell. So, if retailers and manufacturers start to restock, International Paper could see a major uptick in sales—and that means their stock could rise, making it a top stock to buy now if you’re playing the stock market game.

While there’s always a risk that the economy could take a dip, many analysts believe that the fear of a recession is starting to fade. So, even if the economy stays steady and businesses just stop cutting down their inventories, International Paper could look like a much more attractive investment soon.

In summary, International Paper is the kind of high-risk, high-reward stock that could help you win your stock market game. It’s not for the faint of heart, but if you’re looking to make a big move and take a chance, this could be the stock to help you outmaneuver your classmates and land in first place. Just remember, once the game is over, long-term investing is all about diversification and keeping risk in check. But for now, it’s all about winning, and International Paper could be your secret weapon.