Addition by Subtraction

 | Sep 16, 2013 | 11:13 AM EDT
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Addition by subtraction strikes again.

This time it's Packaging Corp. of America (PKG) buying Boise (BZ), and Allegheny Technologies (ATI) dumping Tungsten (TUNG). These are both amazing deals.

First, Packaging Corp. shares should go up as we are getting a further takeout of capacity. It is "son of" International Paper (IP) buying Temple Inland, a brilliant deal that cause IP to rip through the $40s.

ATI's sale of the Tungsten division for $605 million to Kennametal (KMT) is also incredible because that was the pride of ATI. I remember when I recommended ATI as stock of the year six years ago because the price of Tungsten kept going higher and higher as the high-strength alloy was in huge demand. Now ATI is content to have the cash. It makes sense that it should go up because it shows that management is willing to sacrifice anything to get this stock going.

In the meantime, I believe Kennametal should be up much more than it is. It is a terrific deal for them, too.

These companies really get it. They want their shareholders to win.

It's a whole new era.

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