Some reports and analysis of North America’s timber finance 2015 are examined.
Nicholas Bodnar — Seeking Alpha
• Acadian Timber is an overlooked Canadian microcap lumber company, with some of the highest margins in the industry.
• Currently the company is trading for a relative discount. There are a few forward events that may influence a convergence of the discount.
• A strong US dollar, the lift of the Softwood Lumber Agreement, low energy prices, and Canadian subsidies, will benefit Acadian Timber, unlike its US peers.
• Positive macroeconomic indicator suggest that Acadian Timber will benefit from a recovering economy.
As a business, ACAZF is a supplier of forestry products in Eastern Canada and Northeastern United States. The products that ACAZF sells are softwood and hardwood saw logs, pulpwood, and biomass products. In 2014 the company sold to 90 regional customers in North America.
On a consolidated basis, the company has ~2.4mm acres of land under management. The company also owns a forest nursery in Second Falls, New Brunswick. Finally, ACAZF provides management services to ~1.3mm acres of land under Crown Licensed Timberlands.
Plum Creek Timber and Weyerhaeuser Oversold
“Plum Creek Timber Co, (Symbol: PCL) presently has an above average DividendRank, in the top 50 per cent of the coverage universe, which suggests it is among the top most “interesting” ideas that merit further research by investors.
The DividendRank formula at Dividend Channel ranks a coverage universe of thousands of dividend stocks , according to a proprietary formula designed to identify those stocks that combine two important characteristics – strong fundamentals and a valuation that looks inexpensive.
But making Plum Creek an even more interesting and timely stock to look at, is the fact that in trading on Thurs- day, shares of PCL entered into oversold territory, changing hands as low as US$44.81 per share.”
Shares of WY entered into oversold territory, changing hands as low as US$28.54 per share.
In the case of Weyerhaeuser Co, the RSI reading has hit 28.2 — by comparison, the universe of dividend stocks covered by Dividend Channel currently has an average RSI of 42.5. A falling stock price — all else being equal — creates a better opportunity for dividend investors to capture a higher yield. Indeed, WY’s recent annualized dividend of US$1.24/share (currently paid in quarterly installments) works out to an annual yield of 4.25 per cent based upon the recent US$29.24 share price.
A bullish investor could look at WY’s 28.2 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. Among the fundamental datapoints dividend investors should investigate to decide if they are bullish on WY is its dividend history.