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Bullboard - Stock Discussion Forum Ainsworth Lumber Co Ltd ANSBF

GREY:ANSBF - Post Discussion

Ainsworth Lumber Co Ltd > Bubbles burst
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Post by dosperros on Jan 18, 2013 4:06pm

Bubbles burst

Be mindful of the downside to HL coming onstream.  If ANS does it so can LP etc.

 

OSB has unlimited inputs in weed species like Aspen and is still essentially directly tied to the North American hosuing market.  Unlike timber, there is no supply/demand disequlibrium that is lasting.  So once supply and demand match back up again expect OSB to be priced at it's traditional levels, which is a bit above cost.

 

Granted, capacity has been destroyed.  And these guys cannot pay a competetive wage for trademen.  And... loggers just retired and sold thier kit.  So, it may be five years // or the slowdown of the oil sands that prevent a full balance of supply/demand.  And where there is market disquilbrium there is excess profit -- and big gains to be made.

 

I don't know if you guys read the analyst reports or not, but basically they value the firm based on EV/EBITA multiples.  It's cash flow driven and when RBC or Scotia plugs the numbers they use fairly conservative cash prices.  No news there, but in doing so it will see them always lagging a bull market.  ANS will be at $4 before they raise their price target to that; etc.

 

Finally, NBD and ANS -- I'd say that will go by the end of the year.  There are too many synergies to disregard.  And ANS is probably one of the worst managed companies in Canada.  Sit through a conference call and it makes you want to pull your hair out when mumbling Biff rambles incoherantly.  So, pooling NBD and ANS allows OSB to catch up to timber's 10 year head start in Asia and develop a market not called Japan.  ANS does hold some nice patents though like Teal (a buddy of mine worked on) and PointSix.  So, good technical skill but terrible manegement.  I wish I could trust their strategic direction more, but Brookfeild will help steward the firm in the right direction eventually.

Comment by louel on Jan 18, 2013 5:33pm
Are you nsure you are not refering to the company when Richard Huff was CEO. It is now basicly ran by Brookfield. They also market to Japan and China along with the US. Following is Cpy & Paste Ainsworth Lumber Co., Ltd. Friday announced the appointment of Jim Lake, currently Vice President, Operations as President and Chief Operating Officer, after President and CEO Richard Huff announced his ...more  
Comment by Ciao on Jan 18, 2013 6:47pm
With financing the EV did not change much (as dilution due to increased shares o/s) as the debt was converted to equity.  EBITDA will change dramatically with sustainted prices and increased output. 
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