Post by
Apaulson on Oct 13, 2023 7:50am
Valuation
As of June 30, 2023, Interfor had paid in $720 million in lumber duties, of which most in the analyst community believe will be eventually released back to Canadian producers like Interfor. Last time the US conceded on their self-serving argument that Canada was dumping lumber, they agreed to a settlement where producers received 80% of the duties on deposit. If you estimate a conservative 55% of the duties, this represents $7.70 per share in a potential refund for Interfor.
Interfor also has timber rights/tenure in B.C. which it is trying to sell and based on a certain analyst who wears rose tinted glasses all the time, every day (Daryl S.), these timber rights are worth around $200 million (or $3.89 per share).
If we believe Interfor last purchase of Chaleur Forest Products (some say they overpaid) at $325 million (or $6.32 per share) represents market value.
Considering just those three assets, the market is valuing the rest of Interfor's assets today at -0.42 ($17.49-7.70-3.89-6.32), which reflect the market's negative opinion of its CEO, Ian Fillinger and CFO, Richard Possebon to manage the company.
It's time for new managment who can make a financial plan and execute it without destroying all of the company's value....
Comment by
cfliesser on Oct 13, 2023 3:38pm
I fortunately sold my position a while ago. The price to book is ridiculous, but so much bad sentiment out there. Recession is incoming and a housing crash is fairly likely. Lumber stocks will tank no matter whta book value is I think. I plan on buying back at some point when it looks even worse in the economy...