RE:Futures up again - $548 for Sept 2020Look foreard a year -- the next 12 months will be (or could be locked in currently) as the best year ever.
I based this on (rough numbers, top of my my head) for West Fraser. They had 2018 lumber prices of $480 and a 77 cent dollar. They made EBTIDA of 1.2 billion. Just obscene. Anyway, take the futures mid-way for the next year (US 494), dial down the dollar to 0.735, and we are already light years ahead. That's a delta of $50/MFBM CAD which is wild.
The kicker? WFT hit +$90/share in 2018. It's $60 now. So that tells me 50% upside for the favourite son, the king of the forest WFT. The upside for small guys with leverage overhangs like CFF, RFP, RYAM is huge.
My take? Give me an average price of $494 for a year and you've got a $6+ stock here. The highest upside by a mile based on my calcs is RFT with it's 2.4 billion FBM capcaity and tiny market cap. Thier billion in debt evaporates fast and as it goes tripes the share price as it does (same entrepise value all equal, just have cap swap in for debt).
Everyone is chicken little about COVID. If it goes away, great -- the lumebr super cycle moves forward. What if it stays? Well a mass exodus from urban areas and BLM boardings-up keep dricing prices up. Home building is a socailly distancable profession unlke bartending and the like.
Oh well. Can I make 200% off this all? I will if prices stay. Otherwise, who knows. In fairness, we all could have done better as TESLA fanboys (girls) but that's high risk trendy. This is the low key way to get absurdly rich if you have the gumption and timing.
*Sry for the typos, quick blast from phone*