Ainsworth Lumber Co Ltd ANSBF

read the cibc report today....

[fibonnaci]

for those who have not read its contents..... here is a quick rundown, its a bullish report to be sure but not outrageously so

 

cibc is bullish but conservative with a 4.75$ price target for 12-18 mos with a sector outperformer rating

 

headline of the report suggests more upside coming, leverage declining, dividends within a couple years

 

cibc is very bullish on the idle capacity at high level and grande prairie expansion too.... comparing the $90 million required to complete both expansions versus $600 million to start from scratch at todays prices

 

cibc is not worried about all the idled capacity coming back online in 2013 and 2014, 5.2 billion sqft

 

cibc says after the current run, most of the "easy" money is off the table but they still think there is upside with a nav of 5.20

 

glta

[mapmaker]

do you have a link for that report?  

[mapmaker]

do you have a link for that report?  

[fibonnaci]

no.... its a pdf

[dosperros]

Great to hear, thanks for sharing.    Did you happen to notice the price estimate for Q1?  If CIBC is anything like RBC they may be overly conservative and estimate a price in the high 300's.  Today OSB is at $430; so it's most likely that ANS ought to book gross sales of at least $410.   It's not a huge top-line inplication to miss prices by a few dollars like

[mapmaker]

im tracking the osb price and the average benchmark is now $413(western) with 3 weeks to go for the Q1 quarterly. Ive priced out EBITDA for Q1 using this ratio from a past report  Ainsworth's earnings            are highly sensitive to changes in commodity OSB prices; our model predicts a  C

[ahs]

Brief article on the CIBC report: https://www.istockanalyst.com/finance/story/6336702/ainsworth-lumber-initiated-at-sector-outperformer-by-cibc

[fibonnaci]

from the report....   2013 estimated osb price is 370$ for cibc   the nav price of 5.20 is based on a 6x ebitda multiple on earnings based on 270$ msf osb price   they also assume net cash per share will be .22 after paying off debt at the end of 2014

[estebancaballo]

very interesting F....do you know if lumber co's generally trade at/below/above their NAV? If not I will do the research......

[dosperros]

NAV is not something that I pay much attention to.  It's either significantly less or significantly more depending on the business cycle.  In a bust it's pennies on the dollar, but in the boom, or the upcoming super-cycle, it may exceed.  All forestry equities have been depressed since the crash and I'd wager all are   Cautious analysts use it as a high-water mark

[estebancaballo]

Right D, I brought up NAV as it had been used as a metric in a previous post and piqued my curiosity....(which killed the cat but not the perro). Fascinating analysis....hope it all comes true as you predict....I am most pleased with the thought that ANS may restart the HL mill at little cost and add 50% to its production by summer (or thereabouts).....all imho, do your own dd......