West Fraser Timber (WFG.TO) Buy, Sell or Hold

West Fraser Timber (WFG.TO)

97.37

-1.81 (1.82%)

as of Jun 19, 2026, 8:00:00 pm Market Open.

122 watching

BUY

2011-12, 2015-16 and late-2018 were corrections. After each one, lumber rallies. Lumber is his favourite commodity. Short-term expect weakness, will pick up later. WFT is doing this, picking up, lately, breaking its 2019 downtrend. Any lumber name is timely and good to buy now. Lumber will do well going forward.

PAST TOP PICK

(A Top Pick Nov 05/18, Down 18%) He guessed it would go to $80 and it did for a moment. The turnaround in the housing market looked good at the time he recommended it. He did buy it and took a small loss. A good trading stock but wouldn’t be buying it right now.

RISKY

Mills are closing in BC, leaving more operations in the US. Housing there is stabilizing and lumber prices have perked up. If you believe we are not headed to recession, the stock could rebound. Remember, these are cyclical stocks -- not long term holds.

BUY ON WEAKNESS

His first job as an analyst was in forestry products. What he learned was that this is a very cyclical business. You want to buy them when their earnings are down and the their PE looks high -- but not on a price to book level. He has not seen enough of an extreme to enter just yet. Book value is $40. He would be patient and look to buy closer to this level.

WAIT

He was recommending lumber in early 2019 as a good commodity to invest. Over the last week there is volume coming back in and if it can trade back above $65-$70 he would be back in. There is good value here, but he would wait for the breakout. Yield 1.3%

BUY

Canadian Forestry stocks. Here is an industry that is in a bit of oversupply. Curtailing production should be good in the short term. We are seeing all of these stocks selling towards their lows rather than highs. CFF is selling at a fraction of the book value. They have had negative earnings of late. WFT-T is 1.5 times book. IFP-T is at book value but has a much higher multiple. WEF-T is trading in the middle of the previous two but with a much more significant yield, possibly not as secure. They all have reasonable assets. They are a decent value play and could stand to do well if we get a building resurgence. You have to be patient.

COMMENT

Forestry is out of favour. WFT will be victim to commodity price swings. But US housing will rebound this spring and will benefit lumber stocks.

DON'T BUY

West Fraser vs. Canfor He owns neither, as lumber prices are weak and not rebounding in the spring when they usually do. They're trading near book value. The upcoming quarter will be weak for lumber. Be cautious here, but start doing your homework on them.

BUY ON WEAKNESS

He is very constructive on lumber and it is his favourite commodity. We saw a double bottom and a pull back. A longer term base is developing. The next 4 year cycle is developing and he sees significant upside and he buys on weakness.

WAIT

Lumber's seasonality is between early-November and early-March, before people actually buy their homes. Lumber prices are starting to rise from a serious low (and bad year), but they're starting to come back. WFT had a declining trend based on the falling lumber price, but peer Canfor is cutting output which may benefit EFT. He's concerned it touching its 200-day moving average and declining today. Support at $70, its 50-day moving average. If it holds less level, WFT could see higher highs.

WATCH

Basing after a downtrend. If it breaks $75 it could be very bullish. It is looking constructive.

PAST TOP PICK

(A Top Pick Feb 20/18, Down 18%) Despite a large increase in the price of lumber and strand board, the stock fell. He sold it in July. An analyst thinks lumber stocks are showing good technical signals. If housing rebounds this stock would benefit significantly. He is not convinced yet.

DON'T BUY

WFT-T vs. IFP-T. He is still cautious on lumber stocks. We have seen the peak in US housing. Canadian lumber stocks do better with the Canadian dollar down. IFP-T is a better play because at least 50% of the lumber is out of the US. There is probably going to be a bit of a cloud over the sector for some time.

SELL

Timber has been a very volatile sector this year. A highly cyclicaly business. Avoid this sector, even though it's been oversold. Sell when this rallies.

PAST TOP PICK

(A Top Pick Sep 07/17, Up 15%) This is all related to US housing. 40 – 45% of wood demand goes into repairs and renovations. Their product also goes to China and Japan. About 2/3’s of their operations come from the US. They have a good balance sheet. He expects to see US housing industry pick up in the spring.

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