Why Clearwater Paper's Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of paper product maker Clearwater Paper (NYSE: CLW  ) jumped 11% today after the company reported earnings.

So what: Third-quarter revenue rose 1.6%, to $487.8 million, and net income was $13.3 million, or $0.60 per share. But there were one-time costs associated with major maintenance as well as small accounting benefits. After adjusting for these items, earnings were $6.4 million, or $0.29 per share, which is $0.03 ahead of estimates. 

Now what: Consumer products actually saw sales decline, so the slight improvement in revenue was due to the pulp and paperboard market, which management said is seeing strong demand and pricing. But this isn't a growth company, and with earnings down over the past year, there's little for me to get excited about. Shares trade at a hefty 24 times trailing earnings, which is just too expensive for me given the weak growth levels.

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