Ainsworth Lumber Co Ltd ANSBF

ANS Dividend

[dosperros]

Hi team,

I hope that the GP expansion remains on hold for the time being -- labour competition with the oil patch will make this a nasty challenge.  It's also going to be mutually exclusive with a dividend for the time being.  I say this because ANS will hopefully be more cautious after driving the firm into the ground "restructuring" via aggressive use of leverage.

Here's my prediction on the dividend: $0.50 per share this summer.  It'll be a 'special' issuance and not recurring.

This is because Q1 2013 EBITDA will be $80.5 million.  It'll be nearly double the $47M this last quarter.  Prices have been about $430 baseline for 2013, which is 30% higher than the $330 average price from Q4 2012.  Let's hold costs constant and adjust the top-line by 30% -- big changes.  I think it would be reasonable to pay out a total dividend of $50M after generating $80M in EBITDA next quarter.  It'll kick-start share price leading into High Level.

 

** Did anyone notice Goldman Sachs of New York City on the conference call?  Wow.  The big boys are sniffing.  If they smell arbitrage (via the dividend) hold onto your hats.**

[dosperros]

Sorry about that  -- I forgot the share float is 240M.  I can't see a dividend payment of more that $50M at the end of Q1 2013, so my "$0.50 per share" is more like $0.21.

[estebancaballo]

Not sure if I agree about the competition for labour with the oil patch....the skills need tor run a mill do not always overlap with those required for the oil patch.....there must be a lot of guys who were laid off from the lumber mills that would like to go back to those jobs...sure beats working away from family and at 40 below in Fort Mac.....thanks for your views on the possible dividend

[specboy2011]

GS would be their sniffing for a deal or a crack at a percentage..They all want a cut.

[dosperros]

You're very right -- lumber and panelboard labour pools are 90% safe.  But check out Canfor's careers section.  8 millwrights needed in Houston...  things like this.   It's only skilled trades that are short.  This is the difference between running two shifts or three.  This is where the patch has wrecked havoc on forestry.   And the work is just as

[estebancaballo]

Good points, 2 dogs, money talks (barks?) and ANS may just have to give signing-up bonuses to those guys to get them back into the forestry industry....they may do so if the demand is there - and it is, imho! In any case I can't see them losing huge amounts of business due to labour shortages...maybe some delays and higher operating costs but with the high prices they can demand for OSB

[louel]

   As of Feb 28, 2013 a total of 10 institutions held 66.9 % of ANS shares    An additional 4.26% were held by 10 different Funds.       71.16 % in total some appear to be still accumulating.   That only leaves around 69K   free floating.   It is easy to see why the share price is escalating. &

[louel]

Typo that should have been 69  Million free floating shares out of 240M  total

[estebancaballo]

Yes and I guess the rest of the shares are held by other, smaller institutional investors and by retail investors like us......if the average retail investor starts to move more into this sector we could see an uptick in the sp....of course it is all subject to continued improvement in the industry (which is a given imho).

[louel]

That's correct the 71%  represents the holdings of the ten largest institutional and fund positions.   When these firms take positions like Fidelity Funds of over 9 million shares. Or FMR with more than 11M.,    69 M  floating is not a large amount.   There are in total 69 of these firms holding holding or accumulating ANS

[estebancaballo]

Yes, I think they have been carefully watching and following my investment moves.....:) Next thing they will be buying BBD and LOT........