RE:RE:Meanwhile in the real world, Lumber Prices up 5% today OSB lagged lumber and is here now. Assuming both at $1000, OSBs costs of $200 make a major difference in margin vs lumbers $350 or so Panels have less substitutibility and are rising, whereas lumber needs to moderate as its outpaced steel by 10% or so
NYSE listing? See WFG and RFP. IFP has good IR from what I've seen, so it's not a promotion question
LPX is in de commoditized siding largely. That is a major plus.
LPX has a capital allocation strategy, unlike most on the Canadian side save for West Fraser or Resolute. That alone is a massive albatross here. Granted it's worse for Canfor given their wild and unpredictable adventures -- IFP runs a much tighter ship (stronger Board).
Don't get me wrong I have a large IFP position. But the weaknesses is historically awful industry-wide mgmt that causes this to be a show me story. LPX like Norbord has been well run for years so there is no worry. The lumberjacks love a race to the bottom and really deserve no benefit of the doubt. Even the "finance guys" in lumber are staggeringly inept -- listening the Canfor guy is painful. The biggest issue is the Board level appointments are myopic at best. Again, not inspiring much faith.
I'm not fussed as we can earn right through this like a dude named Kyle punching through walls after 3 FourLokos But it's key not to overstate the bull case while explaining away the headwinds that will take years to resolve. It's going to be rocky until it ain't. And that's predicated on reigning in the reckless M&A and bringing on a more diverse senior leadership perspective.
What would put a floor under this? See Acadian timber. A div. But, like Canfor, the CFO here was not having that. It'll be puny and episodic was the gist of what he said. You have to frame this over a 10% ncib, right That can do, what, $160m annually? But these guys could realistically generate their market cap in 2021 assuming we average $900 in 2021 Trying to ram that extra $1.35B into M&A???? Say it ain't so.