Jim HuangWestern Forest Products Inc.WEF.TOBUYSep 03, 2014
Thinks it is great news that Brookfield, since they have made their money, is exiting. Liquidity should be a lot better. Their exposure is not just to the US housing market, which he is very bullish on, but also to the Japanese and China markets.
Stockchase Research Editor: Michael O'Reilly This TOP PICK operates 7 sawmills and can produce 1 billion board feet of lumber annually. Production was slowed in December due to market conditions, which has impacted the stock's value short term. Management expect production to return in Q1. We like that the company generated almost $250 million in free cash flow last year, more than the past four years combined. This was while retiring debt and buying back shares. It trades at under book value. We recommend a stop-loss at $1.05, looking to achieve $1.80 -- upside potential over 35%. Yield 3.7% (Analysts’ price target is $1.79)
He considers forest stocks to be a hold. He is lightening up on his position. You should buy commodity products when they are not at a historic high like now.
(A Top Pick May 19/20, Up 191%) Lumber has become the hottest commodity. It is still not back to its 2018 high, which it should get to if lumber prices stay high.
An exciting time in home builders. Under made homes for several years in the US. A powerful rally. Likes that WFG is now a combined entity. WEF is a small cap and is more whippy. Both are good.
The U.S. housing boom has fuelled lumber prices and WEF, a strong tailwind. These prices will remain strong for a few years as Asian economies also pick up. Doesn't know WEF that well.
He considers it a buy still today. It has not recovered as much as the other three. It is because it is a specialty lumber products company. The price of lumber has been on a tear this year. The strike is no longer in place but it is trading lower than it was then. There has not been a single share sold by insiders this year. The risk/reward ratio looks quite attractive.
Has owned it in the past. He sold it in Feb/March when all that disruption happened and he didn't know what would happen (Covid). In the past 6 months, so much happened and he missed WEF popping up. He regrets selling this. He's now watching this. Can't say yet how US tariffs rolling off will effect this; he will study this. Likes this company and management. Should do well.
They just announced third quarter results. Earnings are second highest since 2018 when the stock was $2. They do specialty lumber and they are diversified, so they move more gently. The valuation is attractive. The dividend should come back.
Disappointing over the last couple of years. Doesn't see prospects to improve. Will remain under pressure. Be careful with this investment. If you can't make it during the boom days, you won't be able to make it during the challenging times.
(A Top Pick Jun 14/19, Down 23%) They were stopped out of it and they allocated more to health and tech. Now lumber prices have shot up. He now expects a housing boom out of the pandemic.
He sold it in May. He was worried about WEF's viability. This was the wrong decision. WEF products demand has rebounded strongly that he didn't expect. WEF cut the dividend to zero. The long strike they had then the pandemic coloured his decision to sell.
Thinks it is great news that Brookfield, since they have made their money, is exiting. Liquidity should be a lot better. Their exposure is not just to the US housing market, which he is very bullish on, but also to the Japanese and China markets.