West Fraser Timber Co Ltd T.WFG

What's not to like

[lifeisgood1010]

Call me over optimistic but i firmly beleive that the best is yet to come with lumber stocks.

There is so much tail wind for the industry.Here are just a few:

1-While we are stiil subject to duties, they are half of what they were.

2- We are already 2/3 in Q4 and pricing for that quarter is at historical high for a Q4.
Ok, it's not the $950 we saw in sept. but this was an anomaly.The jan. contract is
at $650 witch is exceding the previous 2018 all time high of about $620.This $620
was for the summer contract were demand is high so can you imagine that we are at
$650 for jan. and $630 for march.

3- The duties that the lumber company will get back will be added to an already super
strong balance sheet.

4- With the level of Gov. indebtedness, we we be in very very low interest rate for a very long time.

5- Housing in the US is very strong and 2021 is forcasted to be even better.

6- The age of house in the us is about 40 years witch is an all time high.

7-With all the work from home new vogue, we will see healthy R&R again in 2021.

So as you can see,these reasons are more than enough for me to be a holder and not a seller
of my 3 biggest position in this sector(WFT, IFP and CFP.

Let just hope that management don't go crazy with all that cash and over pay for acquisition.

So far, the merger between WFT and OSB is a brillant move and the stock buyback from
IFP is also a good use of cash

[Dadsaid2]

There is no way in hell that Brookfield let all that Norbord cash go to West Fraser. The fix is in my friend. One last special dividend by Norbord to pay the shareholders a goodbye Christmas present of which Brookfield is the largest, as in 35 million. Brookfield gets $ 140 million in cash and 23.6 million WFT shares that they may or may not sell at some point next year.... Just saying...GLTA

[lifeisgood1010]

Your opinion is as good as any but i disagree just because Brookfield has already agreed to the deal. If Brookfield wanted a special div,it would have been part of the deal. Brookfield knows that to have these two best in class company together makes their investment in OSB a much better one going forward. Like i said this is 1+1 = 3 The market is just starting to get warm to the fact that

[dosperros]

I see merit in both arguments.  The main point is these are separate companies until it's official. As such, they deploy capital in isolation and to its most effective use until they get the all clear. Nobody is going to go on a wild spending spree or anything, but a meaningful portion of the cash war chest is up for grabs I think.  Why would it not be?   WFT also

[Dadsaid2]

You can't write a dividend in an agreement of this sort. It is illegal. So you can disagree with me and bet against it all you want, but you'll see. I don't think you understand what goes on behind top executives closed doors and boardroom meetings. That's what l.mean when l say "the fix is in". No way Brookfield will not get their hands on that cash my friend. GLTA

[dosperros]

I'm betting the same as you are -- that this happened.  Well, it's not really a bet as it just means maintaining my positon in both, but I'd be inclined to see see BAM get paid. Notably, in the presentaiton on page 15, both companies have a similar amount of cash on hand as of Q3.  So combined pro forma cash is $475M.  That's plenty I think.  So, OSB may

[lifeisgood1010]

Ok, so educate me.Why can't they write a dividend in  "takeover/merger"? By getting 44% of the new companyy, OSB gets well compensated. As far as i know, there would have been nothing illegal to include a special div. in the deal OSB is trading at 3.7 book while WFT is trading at 1.9 WFT paid up because of the superior ROE of OSB. Shareholders of both entity will benefit

[jcjohn36]

Lots of good reasons but at the end of the day it's all about supply and demand for these commodity stocks. Should a whole bunch of new supply come onboard this spring prices will falter along with the SP and if there is not enough inventory available prices will rise and the price of houses will as well eventually curbing demand.

[dosperros]

Where will the supply come from?  And at what timeline? If the US is significantly under-housed, will a 5% increase in build cost curb demand?  That was $1000 lumber adding $20k.  The exception doesn’t bear that spurious line of reasoning out.  It's more than a wash with such cheap rates.  $800+ at a sustained level will bring substitution to a degree, but it's