Mention of Canfor in Globe and Mail Article today Globe and Mail Article: Four TSX stocks with superior valuations well-placed for the energy transition
The screen yielded four companies from four different industries. In terms of valuation, Canfor Corp. (one of North America’s biggest lumber producers and 85.1 per cent green according to GRCS) stands out with a StarMine 100th percentile score – with a price-to-book ratio of only 0.6, compared with an average of 1.3 and 2.8 for its Paper & Forest Products and Basic Materials peers, respectively. A slowing of U.S. housing demand is a potential risk for Canfor, but while the lion’s share of its costs are in Canadian dollars, more than half of its revenue comes from the United States. So, while rising U.S. interest rates would dampen demand for housing, and thus Canfor’s lumber products, they would also increase the value of the U.S. dollar. A more valuable greenback would improve Canfor’s margins and provide a natural hedge against slowing housing demand south of the border.