RE:RE:when does q2 2021 drop? Well, that's good detail and solid effort. I'd comment on a few assumptions that don't hold up however:
1) Doman and co fleeced the dude driving that clown car also known as RYAM. Paul Boyton is a legendary buffoon. He should have decoupled the single newsprint mill as that was the albatross. There was zero need to sell those assets at 1/3 replacement value. That's what Dunkley picked up junk C&C odds and ends for in the depth of '19. Check out the massive transfer of wealth that ensured.
2) Lumber has a new floor as costs have risen, ditto with demand. I wouldn't sweat the volatility. Corton Captial has it right again per John Duncanson.
3) Power doesn't trade at 3x, man. It's a pretty tight standard dev around 10x, and the annuity rev is not a strategic worry given this remains BC headquarterd. Hydro is choked paying 10c per KWH to foreign owned outfits of course -- they need to worry. I see this being safe and sustainable.
4) Your sum of parts is roughly the value of the timber tenure and ignores the iron on the ground. Assuming there is little or zero cash flow too is a bit decoupled from the supply demand realities too. These will trade at earnings multiples, not firesale liquidation prices right. That's the point of supplier discipline, beetles, fires, CLT, the 5M unit housing shortage, 40 year old median housing stock, demographic tailwinds, etc.
5) Per share value is dynamic. There is no cap to a SIB. Do what WFT did and take one Q of earnings (well, less than that maybe a month or two) and SIB it. A Q2 here pushed into a SIB is going to be ballpark $30m. That's more like a 1/3 reduction in shares.
So, lumber is likely good for $600 to $800 long run, meaning the sensible take on a valuation -- even at low end -- is going to be 6x an ebitda of ~$30m over a de-leveraged entity with ~30m shares. That's $6 as a future scenario that -- much like $200+ WFG has not yet emerged but you don't have to be winning the game in the early innings when the deck is stacked in your favor. That's for a litany of reasons. So, lay off the caffeine late night if these luridly described dreams, as you creepily articulated, are causing you to change the sheets more frequently than you'd like.
I have this back as a lower ranked holding... a #7 or #8 holding. I want the upside that comes with a $6 at virtually worst case and much higher in reach, but I have zero use for Ken, that lazy troll at the top who can't do the very basics (HR, Investor relations, communicating a strategy etc.). The only thing he's doing well is gobbling up inventive shares and churning the team. Like Russel Crowe yelling "ARE YOU NOT ENTERTAINED?" in Gladiator, I wonder what egregious nonesense allows Ken to be not incented with an easy job of minimal scope and a $1m base wage. Truck you pal, you are a disgrace and you have the audacity to further dilute the share count?? Ohhhh-kay then.
Given the venom I spit, it's still greed o'clock in spite of it all. That said? It means a quarter of earnings let's you buyback pushing half the company. In the more deservedly and fairly valued WFT, a few months of spare cash gets you 10% retired. So glass is half full right, and realistically I may need to muscle in for another 50 or 80k in shares given you can only defy gravity for so long, and this blip is sparking some catastropizing from the cheap seats which is a signal that I pay attention to.
Anyway, I've been AWOL but this is a notoriously smart board so I'll have to pivot back here near term. It's very different prospects than that of the guys who drew the shorter straws and were drafted into the Western Forest Products fan club. Yikes on that one.
Final thought is Ken can still snatch defeat from the jaws of victory via bad capex, but even yelling "SHUT UP AND TAKE MY MONEY" won't get him far. He's tired, has no team, and the vendors are backlogged with Tier 1 clients with no time for the bottom feeders like this outfit. It's part of the reason a sale is needed as the banner must change.
Take this ramble for what it's worth -- phone typed while holding a baby. That said, I've talked myself into taking a bigger stake as much as I still prefer RFP and WFG, with an Interfor chaser at the more concentrated level. Like I've always said, this intransigent Yahoo could just pay a div and get to $5 overnight... some valuation takes are contorted and reaching, but a more meat and potatoes dividend discount model gets you there. Stick to basics. If you want to know what annuity cash in a steady div situation looks like check out Acadian at 18x.