Interfor Corp T.IFP

Stocks trading at 1 x EBITDA

[Rational43]

Are usually:

1. Near bankruptcy
2. In Russia or Zimbabwae
3. Microcap's with a lot of uncertainty

Interfor does not remotely fit any of those risk factors, and yet here we are, well, well, well under 2 x EBITDA for 2021.  

Paying a 7% dividend from ONE MONTH OF CASH FLOW
Next month buying 25% more lumber mill capacity

What we have are a bunch of "smart" people waiting until lumber futures stop falling to pounce on Interfor.  There will be a lot of people trying to wedge through that door to get in, as everyone knows this is at least 50% undervalued, on conservative future lumber pricing.  

Now my biggest holding, I went ahead and pre-spent the dividend on more shares.

[dosperros]

It's likely a smart play but you understand the market is linearly projecting the current lumber price correction and basically baking in it's hitting $600. So your multiples when applied to that become far less incendiary.  Add in boondoggles and capital leakage (do. Not. Rebuild. In. BC) and that explains greater worry. That's literally your best idea Ian?? JFC BC stumpage is

[Rational43]

I think you've done a good job of summarizing the consensus opinion driving IFP's stock price right now.  I'd love to see a further correction down to $25, but that's the greedy side of me.  I think it will take a lot to crack $30 on the downside, so my upside / downside price band works for me here at $31.  Timing is definitely an issue, and if I had a crystal

[StefanSalvatore]

I agree mostly with your points as it is unwise to look at their low p/e multiple and their low EV/EBITDA multiple to think it it is a good buy. Low multiples suggest that we are at the top of the cycle. Even though we're in the midst of a supercycle lumber stocks are still highly clyclical. If these lumber prices persist into Q3 then maybe the multiples should push higher. Usually forestry

[dosperros]

Ifp at 88%, by my books, is reasonable. I was 120% in Conifex at one time and went from, um, affluent to much less affluent pretty quick circa 2018.  Cff is a far sketchier entity as you know, with much greater surprises. IFP has a steadier hand as much as I rip on Ian knowing what I know now. Moreover there is asymmetric upside in a takeover. Worst case?  You see this back to $18 in

[StefanSalvatore]

Yeah I actually had to sell both CFFand WEF to get to 88%. In short I sold Conifex because of management and the excuses, and Western because their sales are mostly premium lumber but prices are stagnant (They arent benefiting as much from the past surge in commodity lumber). But essentially I added to my IFP position at high 34's and low 35's which was terrible timing but hey the special