Plain speaking' -- TMB vs. CFX vs. MERC. Whi is worth most? I think I'm a bit long on I-banker type jargon. The 'multiples' I like are capital structure agnostic and yadda yadda yadda.... nobody cares!!
Let's look at market cap. Who is worth what?
Canfor Pulp -- $680M. Four pulp mills. No spec. cellulose. No lumber. No high-value paper. No power to sell. They make a bit of power but don't feel compelled to report on what they sell. They don't feel compelled to do much; that was one of the worst investments I have ever made. Thankful to be out, albeit with a monster capital loss.
Mercer -- $688M. Three or four pulp mills. See above. Worth $688M USD, so almost a billion CAD. Nothing special about it.
Tembec -- worth $190M. They used to be worth $626M. Back when they sucked. Now they don't suck anymore. Wonder if they will go up. Hmmm. They are a far better company than Canfor Pulp -- by miles. CFX has a brutal strategy.
That's all that comes to mind. Or, what about earnings?
Norbord - worth $2.9 billion. They earn like champs, and should put up $500M in cash this year.
Tembec -- worth $190M. They are now making big profits. They are just using it for the debt pay-down. They made $57M in cash last quarter. Norbord made $114M. So is Tembec about half the cash as Norbord? I'd say that's fair, plus or minus a bit.
What's the 'so-what' of this?
Well, TMB shares would be at ~$6.00 if it was the same as Canfor, or $8.00 if it was the same as Mercer, or $14.50 if it was 1/2 of Norbord.
It won't get there overnight but let's just say the facts are friendly. Also, "New Tembec" is way, way, way better than "Old Tembec". Old Temebc was a disaster. Yet, they traded at $6.00 a share. It's all but guarenteed to get back to that level. Well, according to my fancy model that only I like.