From Grant Wasylik with Tom Dyson at The Palm Beach Letter:

The Wall Street Journal called the new company a “$16 billion industry heavyweight…”

So congratulations if you followed our recommendation on elite dividend payer Rock-Tenn Co. (NYSE: RKT). On January 26th, the company announced it will merge with competitor MeadWestvaco (NYSE: MWV). The new company will supply containers for everything from soda to appliances.

Investors loved the news. RKT jumped 7% the day of the announcement. The stock hit an all-time high.

If you followed our initial recommendation in the August issue of the Palm Beach Letter, you’re up 35%… in less than six months.

Rock-Tenn Rallies After Our Summer Purchase

When we first told you about Rock-Tenn last summer, investors weren’t crazy about the company. The packaging and containers industry just wasn’t “sexy” enough for them. It’s a good thing we didn’t care…

We saw a stock that was 59% cheaper than the market on a price-to-sales ratio. And cheap on a price-to-earnings comparison as well.

Rock-Tenn had raised its dividend every year since 2008. And management was aggressively buying back stock—a clear sign they, like us, believed their stock was too cheap.

So for each share of RKT you own, you’re entitled to one share in the new company. Or, you can “cash out.”

We’ll let you know exactly what to do with your current “paper profits” in the February issue of The Palm Beach Letter, coming to your inbox this Thursday.

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