On February 21, 2018, NIA alerted its members about lumber futures exploding to an all-time high of $516.80. NIA announced Conifex Timber (TSX: CFF) at $6.24 per share as its #1 lumber stock suggestion.
Last week, lumber futures exploded to another new all-time high and settled Friday at $536.20. NIA's CFF began to breakout big on Friday rising $0.31 to $6.69 per share. We believe CFF will become one of the largest percentage gainers in the market this week!
In 2017, CFF earned net income of $17 million for EPS of $0.67, with an average lumber sales price of $401. In 4Q 2017 alone, CFF earned net income of $8 million for EPS of $0.30, with an average lumber sales price of $464.
With a lumber price of $464, CFF's 4Q 2017 EPS of $0.30 is equal to $1.20 on an annualized basis. With lumber prices now up to $536.20, NIA believes that CFF based on last year's production levels alone is now in a position to generate quarterly EPS of $0.35-$0.40, which is equal to annualized EPS of $1.40-$1.60.
Last month, CFF officially launched production at its brand new state-of-the-art sawmill in El Dorado, Arkansas, where CFF is currently ramping up production. Once at full capacity, CFF's El Dorado sawmill will account for 25% of CFF's total lumber capacity, thereby increasing CFF's lumber production by approximately 33.33% from 2017 levels.
Including full production from CFF's new El Dorado, Arkansas sawmill, NIA estimates that CFF will generate quarterly EPS of approximately $0.50, which is equal to annualized EPS of $2.
It's unbelievable that CFF is currently trading for only $6.69 per share! After this year's HUGE increase in lumber prices and the opening of CFF's first ever U.S. sawmill after an investment last year of $80 million, a low P/E of 10 together with the very realistic possiblity that CFF will earn annual EPS moving forward of $2, will value CFF at $20 per share or TRIPLE its current share price!
NIA is working on technical analysis charts of CFF that it will publish later today!