Interfor will be taken over or...If management does not do anything with all the cash pouring in, IFP will be taken over.
In any event, the stock will AT LEAST double over the next 3 to 6 months.
I took the time to do some calculations this morning.
For that, i had to make some assumptions for 2021.
Since IFP had EBITDA of $249m in Q4, i went for a low conservativev$800m for 2021.
Cash went up $146m from Q3 to Q4
Assuming that they would not do more buy back or acquisitions or pay div. or special div.
the cash balance would grow from $457m to at least $950m
I doubt that they will keep all that cash on the balance sheet but for calculationspurposes,it will show how cheap this stock is and if nothing is done,it will be taken over.
So as of friday's close the EV/EBITDA would be at
1.59 time.YES 1.59 time.
At $
40 the ratio would go to a
2.58 time and at
$60 it would be
4.23.
If i am not mistaken, these lumber stocks trade between 4. to 8 time,Below i found Boise Cascade historical ratio.And The web site of the Stern NYU done by Aswath Damodaran who teaches corporate finance and equity valuation.As per his recent calculations (Jan. 2021),the paper/forest products trades at a EV/EBITDA of an average of
7.71. So, something as got to give.Either they get taken over, or they pay a huge div. or they buy back shares or they make a big acquisition.
In any event, something will happen.
Once in a while, the market present gifts to the one who do their rechearch and stay the course.
I thought WFG was cheap but IFP looks even cheaper.
Again, don't take my word.Go on SEDAR read the financial and do the maths for yourself.
Don't be fooled,IFP won't go up in price every single day.But if you are like me a long term value investor, you will reap huge benefits by being patient
Stern New York university
Boise Cascade
Performance Summary
- Boise Cascade's latest twelve months ev / ebitda is 5.7x.
- Boise Cascade's ev / ebitda for fiscal years ending December 2015 to 2019 averaged 7.5x.
- Boise Cascade's operated at median ev / ebitda of 8.3x from fiscal years ending December 2015 to 2019.
- Looking back at the last five years, Boise Cascade's ev / ebitda peaked in December 2017 at 9.3x.