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.”
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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.
