Tambourah Metals Ord Shs T.TMB.W

RE:RE:RE:Week of Jan 9th in Review

[dosperros]

Awesome.  Very true.  I am betting the house on TMB myself as well:

1. It's the most undervalued play in the forestry universe by miles  This includes (a) relative value to peers, (b) fundamental value (e.g. DCF, EV/EBITDA).
2. Technical analysis.  This is in a huge MACD breakout.  RSI is strong.
3.  History is favorable (e..g Old Tembec used to be worth much more; but Old Tembec was in way worse shape)
4.  Deleveraging will add at least 30 cents a quarter to the share price.
5. Shareholders in the recap in '08 took a 95% haircut.  They need their money back.
6. Fairfax play.  The big boys don't mess around.
7. Future focused assets; they have turned the corner on the dogs like newsprint.
8. Good management.  The Jim and Mich bro movie went from a frat house comedy to an Oscar calibre flick.
9. General imperviousness to the duties for 3/4 of rev and 7/8 of profit; yet if lumber gets a good deal like I think it will it will be a major "kicker" and accelerate profits.  e.g. they are, now, in the 10% margin on ~400M of SPF sales per year.  This margin is new (e.g. they never made much money in old pricing environments.)  So they have already gone from 2% to 10% margin.  A good deal could see them making 25%.  That's another $90M in earnings on baseline, or another $60M on the new reality.  To make an extra $60M in EBITDA in will directly translate into $3.00 per share now (@5x) and up to $4.20 a share later (when the multiple goes to 7x).
10. Counter-cyclicality and product integration.  It helps.

In RFP vs. TMB I like TMB more.  TMB has a huge edge in my first, second, third and seventh points I think.  RFP is cheap, but just not that cheap.

On WFT. analysts seem to think it's fairly valued now.  I'm a little surprised they think that, but I guess it's just SLA overhang.  I'm just going to bet $10K that we get a great SLA deal because cheap housing is what Trump needs as a rustbelt stimulus.  He will find another way to prop up the US domestic industry I suspect.
 
On WEF, what do you think about them?  My wager is that dog don't hunt.  That company seems to be stuck where it is and has the lowest growth potential of any of the forestry plays.  Just curious because they have a bunch of diehards on their board who defend it passionately.