Can you make money in paper-company stocks? Ask someone who's held stocks from the likes of Wausau Paper (NYSE:WPP), Bowater (NYSE:BOW), or Domtar (NYSE:DTC) for the past year, and the answer would likely be "no." But ask an investor in Brazil's Aracruz Celulose (NYSE:ARA) and the answer might be "sim" -- yes in Portuguese.

Of course, it's not exactly a fair comparison, is it? I mean, Aracruz specializes in pulp -- particularly eucalyptus pulp -- and comparing that to finished-paper makers might be a bit like comparing chip wafer suppliers to semiconductor companies.

In any event, no matter whom you choose to compare Aracruz against, it had a solid fourth quarter. Revenue rose 24% on a combination of strong pricing and almost equally strong production and sales volume increases. While expenses did tick up a bit and the operating margin was a bit lower, operating income still grew 19% over last year while net income more than doubled.

For the most part, these are good times. Demand seems to be picking up a bit in Europe, and global pulp inventories are at low levels. In Europe, in fact, inventory levels are at the lowest point in more than four years. And within that generally positive macro-picture, eucalyptus pulp continues to gain share on other hardwoods.

Investors should also realize that this company isn't quite as exposed to the paper industry, per se, as you might think. In fact, more than half of the company's pulp ends up as a form of tissue. So investors should probably worry less about demand for newspaper and other finished papers and more about a company like Kimberly-Clark (NYSE:KMB) staying on the ball.

It's certainly true that Aracruz has been a strong stock, and it's equally true that stock prices have no memory. In other words, just because it's at a 52-week high, that doesn't mean it can't go higher still. Nevertheless, the story's out on this one, and I'm just not sure how much headroom is left on the valuation. So while I can't necessarily call this a great stock anymore, it's still a solid company with some market forces working in its favor.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).