Wausau Paper Ready For a Massive Breakout

Shares of Wausau Paper WPP are trading lower on the session by 0.41%, at $7.35. The stock has been consolidating just below the 200-day moving average for the past five days following a massive spike higher. With shares of Wausau Paper working off a short-term overbought level, now is the perfect time to accumulate a position. Traders have been doing so for the past three days, making higher daily lows along the process. It is only a matter of time before the $7.47 trigger level is broken and held (shares have tested the level, but have not yet closed above it); this will force the 7% short interest to move fast to cover their positions. Unlike many breakout stocks, Wausau Paper actually has another catalysts to move it higher other than technical pressure. Starboard Value LP, a privately owned hedge fund, just disclosed a 6.3% ownership in the name; they believe that WPP is “deeply undervalued and that opportunities exist to significantly improve shareholder value.” Starboard currently owns 1,966,588 shares at a cost basis of $6.579. Wausau Paper Corp. manufactures, converts and sells paper and paper products. At December 31, 2009, the company's operations were classified into three segments: Specialty Products, Printing & Writing, and Towel & Tissue.