LOS ANGELES, Feb. 2, 2011 /PRNewswire/ — http://www.forestweb.com – Investors continued to buy forest products stocks in 2010, and although the Forestweb U.S. Forest Products Stock Index did not outpace any major indices last year, it did manage a decent gain.

LOS ANGELES, Feb. 2, 2011 /PRNewswire/ — http://www.forestweb.com – Investors continued to buy forest products stocks in 2010, and although the Forestweb U.S. Forest Products Stock Index did not outpace any major indices last year, it did manage a decent gain.The Index rose 7.8% for the year, closing Dec. 31, 2010, at 88.45. In comparison, the S&P 500 Index closed up 12.8% to 1,258 and the Dow Jones Industrial Index gained 10.9% to close at 11,573.The Forestweb U.S. index is a comprehensive, 3-year-old index of 30 publicly traded forest products companies with headquarters in the U.S. It is a market cap-weighted index that continuously measures stock trading activity of major sector participants who manufacture wood, paper, pulp and packaging.GainersTwo small-cap pulp companies were the biggest gainers in 2010, with stocks that more than doubled thanks to higher prices for their products.Mercer International Inc. (MERC) rose 170.0% to close the year at $7.75.Buckeye Technologies (BKI) was up 125.2% to $21.01.DeclinersAmong the six stocks that lost value last year, Orchids Paper Co. (TIS) was the biggest, down 39.1%, closing at $12.24/share.Another papermaker, Wausau Paper Corp. (WPP) fell 26.8%, closing at $8.61.Pulp Tells the StoryThe story behind the winners and losers was pulp. Both Mercer and Buckeye (whose stock was about $2 a share 18 months ago) sell market pulp, including specialty, high-priced types.Wausau and Orchids, however, are pulp buyers. Orchids makes tissue and tissue makers were squeezed because of the higher pulp costs.Integrated pulp and paper companies such as Domtar Inc. (UFS) – up 30.9% — and Boise Inc. (BZ) – up 57.3% — benefited because their costs for making uncoated freesheet were lower.Clearwater Paper Corp. (CLW) benefited from the acquisition of Cellu Tissue Holdings and the fact it also makes pulp and paperboard, rising 32.3%. Its giant competitor, Kimberly-Clark Inc. (KMB), fell 2.6% in 2010.Weyerhaeuser a special case among REITsIt’s important to note that while mathematically the biggest loser appeared to be Weyerhaeuser Co. (WY), the Index did not account for a “megadividend” the company paid to shareholders Sept. 1 when it converted to a real estate investment trust (REIT). Analysts said the $26.46/share dividend should be added back into the stock price to measure true performance since the company was a regularly traded stock at the beginning of the year.Weyerhaeuser’s stock price was $44.28 on Jan. 4, 2010. On paper, it ended at $18.93 Dec. 31, but with the special dividend added back in, the adjusted close would have been $45.39, a gain of 2.5%.The performance of other REITs in the Index was mixed. Rayonier Inc. (RYN), which makes pulp and sells timber, was up 25.1% for the year while Plum Creek Timber Co. (PCL), which sells wood, fell 0.2%.Packaging companies generally did well. KapStone Paper and Packaging Co. (KS), which makes unbleached kraft and paperboard, rose 85.0% for the year. Graphic Packaging Holding Co. (GPK) was up 30.5%.The Forestweb U.S. Forest Products Stock Index is available free at www.industryintel.com.It is available at no charge and e-mailed each day at the close of the market to registered users who may sign up at