Q: I know that you had previously listed West Fraser Timber as one of the stocks that could be harmed by the tariffs. It has decreased over $10 in the past month or so. Do you think it is now pricing in the tariffs or not? Also, do they not have operations in the US? How does that factor into this question?
5i Research Answer:
WFG has operations in S. Carolina and Tenessee and this provides some cushion. It had $3.2B in US dollar revenue in its last reported year. Lumber prices could gain as California rebuilds from the fires, and this may be positive for the company. It is hard to know for sure if tariffs are 'in' the stock, but recent discussions on tariffs suggest it won't be 25% all at once, more like 2% a month for a year. Thus, we would expect the tariff concern issue on the stock to at least back off a bit.