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Canfor Corporation (CFP)
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Interfor Corporation (IFP)
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Louisiana-Pacific Corporation (LPX)
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West Fraser Timber Co. Ltd (WFG)
Q: I have held West Fraser for some time, sold to take out my original investment cost and have been holding the remainder for a few years wondering if or when housing demand will start to boost the lumber/panel prices.
I think now, or soon, is a time to consider adding a different company, near the bottom of the cycle in preparation for a trend of rising prices. Canfor is going to be challenged with BC fibre supply in the interior of BC as a result of fires and government policy, while Interfor has (I think) diversified nicely into the US; Canfor less so.
I already own Home Depot and would like to add another producer; Interfor, Canfor or a strong US producer. Your insights on your "top 2" companies would be appreciated.
As always, Thanks very much.
Dave
I think now, or soon, is a time to consider adding a different company, near the bottom of the cycle in preparation for a trend of rising prices. Canfor is going to be challenged with BC fibre supply in the interior of BC as a result of fires and government policy, while Interfor has (I think) diversified nicely into the US; Canfor less so.
I already own Home Depot and would like to add another producer; Interfor, Canfor or a strong US producer. Your insights on your "top 2" companies would be appreciated.
As always, Thanks very much.
Dave
5i Research Answer:
WFG would remain our Canadian favourite. IFP is quite small, but now has the large majority of its revenue in the US. CFP is still losing money. ADN may of interest. It is small but offers a high yield and a cheap valuation. LPX we think offers a good combination of valuation and growth and momentum. We would prefer not to sell WFG, but if so would move to LPX and ADN. SJ is also a possibility but not exactly the same as the others.