If you had invested in Sappi towards the middle of 2007, its rapid dive to 1 290c/share in 2008 would have left a bad taste in your mouth, especially if you had hoped the fall wouldn’t steepen and kept the share in your portfolio.
Even after rebounding to the 4 000c/ share level, the sideways momentum from 2010 until last year would still have been agonising. But having breached a key resistance level at 3 960c/share in August 2014, Sappi is looking to redeem itself and possibly recoup all its losses.
Sappi had quite a bumpy ride over the past years, as it shut mills in Swaziland, Finland, the US and the UK. Soon after, it announced plans to close two more: one in Switzerland and the other in Port Elizabeth.
This undoubtedly caused a frenzy, with fund managers bumping the stock at whatever possible cost, besides the fact that the outlook for the global pulp and paper industry at that time was already uncertain. The sideways momentum following this drop indicated that frosty investor sentiment had thawed somewhat.