RE:RE:A short read following up my looong previous postBeauty... that's always very helpful to have boots on the ground insight. Running/delays/mutiny... that sort of thing. Keep the updates coming. I’ll send you a DM… if you had a photo to share that would be great as I haven’t done the drive by myself yet.
So the question on market caps and 1x is a good one. Check out this list of the total market per Aswath Damodaran. He's a finance prof who is a great resource. Per this, the total market is 20.02x. So, 1.00x is.... mighty unusual.
https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/vebitda.html
Do the 3rd column in, EV/EBITDA. That's just fancy man's market cap that reflects cash on hand. This is the context of what the price of equities tends to be in each industry. My thesis is we see "multiple expansion" as forestry professionalizes, and also that the lack of debt means a big change. CFF realistically, longer-run, likely is going to be in that earnings range of $20M to $50M. Call it $30M for kicks.
Current EV is $150M, with a market cap of $96M. So that multiple is about 5x (150/30). But as the debt goes away fully suddenly the EV drops to market cap. So now it's multiple shrinks to 3.0x but the business in better. That's not happening, so I argue the multiple at least remains at 5x.... meaning that the market cap swells to $150M simply due to the de-leverage.
So anyway, my "value" stocks are, in order of holding size, Resolute (RFP), WFG (West Fraser), IFP (Interfor), CFF. Anything else I have would be fully valued (ADN, railroads, slumlord REITs, Brookfield, etc.). I like RFP the most as I see pulp and lumber having some traction, and their brutal debt load just…. evaporating. CFF may have the most upside, but Ken's presence plus that grossly incompetent board of directors is super off-putting and I've been burned by it before, so I am a lot more cautious now.