RE:RE:Good WIR. Some open questions for discussion. Hit me up.Lash99 wrote: Dosperros, I like your thinking. I was guessing ebitda around the 35-42 million mark . I can't remember what the year previous was off hand but it wasn't good. Since then the Cogen plant is up and running lowering costs and increasing margins in all segments of their business. Lumber has had reasonable sales all winter but it is trending down of late , I am just not sure of the production numbers as they are typically less through the winter , this is why I am guessing ebitda of 35 million on the low side. Regarding the share price estimates I agree , the TD's and Scotia Banks of the world are not even paying attention to what is going on. I think RBC came out with a very conservative $2.75 Target only because of the duty issues and the potential costs. They are not in the know on the SLA negotiations and you can see it with their low Targets #'s. I think I shared with everyone previously that nothing can be put in place regarding duties until the beginning of May , that is without a negotiated settlement. Rumour has it that Duties will be 20 percent add another 8 percent for anti dumping for a grand total of 28 percent . This is going forward and it will be sometime around October when everything is finalized and put in place. So knowing this it should be business as usual until May 1st and then I will be very careful on putting lumber on the ground in Canada as I do not know if the 28 percent duty will have that as a discount in Canada or prices will go up 28 percent on sales in to the U.S. You just never know where the supply/demand numbers will end up at. Ok now that's the potential duty side , what I think the Banks are being conservative on share price is because of the issue of dumping and or injury to the U.S. Lumber producers. This is going to cost some money legally and currently it is the " Coalition " that will be footing that bill. The NAHB is also gaining strength in the U.S. so now they are going to have a pretty good fight within their own country. There is going to be a lot of talk about this and I think this is what spooked the average investor last week. I say hang in there as there will be a lot more conjecture regarding this in the coming weeks. Remember , the allowable cuts are decreasing , there were 3 large mills shut last year alone that I remember off hand , 1 Canfor , 1 West Fraser and 1 Tolko , that's a total production in excess of 700 million fbm taken off the market. There is more cut backs in the west to come. I am going to stay long on this company as I believe in Management and what they are trying to accomplish. Anyway Rhinodude you shorted this stock and made some money now you are bragging . Is there anyway you can share while not being so self indulgent ? Best of luck , even to those that short ! Lash
That's a good range and insightful.
I'll compare the bad Q1-2016 segment EBITDA of $29M vs. most recent Q4-2016 EBITDA of $57M below.
Specialty Cellulose Pulp: $19 vs $23 -- trend is up.
Forest Products: ($1) vs. $11. trend is up
Pulp Paper: ($2) vs $6 trend is up
Paper: $16 vs $15 trend is neutral.
There is a differential of (4+12+8-1) is $23M. Something looks a bit off as 57-23=23 and not 29 so there is a myster $5 somewhere.
Better CAD rates help all across too. My take is that $57 a quarter is the middle of the roads new norm. Winter knocks off about $8 a year ($4x2 Q) and then we loose maybe $15 a year to shuts. So, ((57x4)-15-8) as a new baseline means the total haul should be $205 for an average quarter of $51.25.
This will be a 'crappy' quarter by Transformed Tembec standard, but it will still blow the year ago's quarter 1 out of the water. Keep in mind this level of earnings is about the same as Interfor and Canfor Pulp. Who are worth ~650M and ~950M each. Why would TMB be worth $201M for the same earnings torque?
Oh yes. The debt, It's like a scary clown. He's how I forecast the Debt to (Debt+Equity) over 36 months:
Now: 76%; +12months 64%; +24months 54%; +36 months 37%. That's conservative based on a 4.35 valuation multiple and attacking $30M of debt a quarter. So, we are we scared of this??