RE:RE:EPS forecast for Q1 from $1.98 to $3.21 in 7 daysHi WhatsBestNext,
Here is my take for your two questions
but how might this estimate EPS of $3.21 for IFP affect stock price?:
Stock price are a forward looking mechanism.I't all based on PERCEPTION of what will happen.
For now, from everything i am reading and earing(conference call),the lumber industry has
never had so much tail wind.Supply can't keep up with demand.Lumber company are
disciplined and even if they wanted to add more capacity, they have a lot of labor and fiber
restrictions.Their balance sheets have never been stronger and the cash generation is
almost unbeleivable.
If i had to bet, it would say that the actual $3.21 will be beaten simply because the analysts
are using about $650 for their predictions(As per John Duncanson).Fridays March lumber contract closed at $979.40 while the May one closed at $834.50
IFP made $2.47 in Q4(a much softer quarter than Q1 2021 will be)plus they will have to pay half the duty on 3 months of sales vs 1 month last quarter.IFP generated about 30% of their lumber from their CDN mills.
Friday, i listened to the West Fraser conference call.If you have 45 minutes take the time
to listen.If you do, you will not want to sell your lumber stocks.
As for you second question
How does it compare to other lumber stocks at this point? :
I own 4 stocks(WFT,IFP,CFP and WEF).Each company as it's own strenght and weakness.
IFP is the pure play in lumber (no paper or pulp).IFP and WFP seems to be the best managed
In any events, i think you will do good owning any of these lumber stocks.
I will say it again for the10th time.Stock don't go up every day/week.At some point,
there will be profit taking or pull back on a bad tape days but
I beleive 2021 will be a spectacular year for this industry.You just need to be patient and let
time do what it does best.In many case i have made more than 100% on some of my lumber
holdings and i am not selling because looking at the profit/cash generation, low valuations, balance sheets strenght...i think there is AT LEAST 40 TO 60% MORE UPSIDE before i start considering lightening up my position.
Even though these stocks have has good run does not mean they are expensive.In fact, they are still VERY, VERY CHEAP witch ever way you look at them
Hope this help ans sorry for the speeling mistakes, i am french.
Have a nice weekend