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Scooped by
Prentiss & Carlisle
April 18, 2013 9:41 AM
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Sitting just last week at #192 on the Zack's Industry Rank list, strong recent demand for building materials --and upgrades to earnings estimate revisions that followed-- pushed key players in the timber industry back into the spotlight.This week, the Building Products/Wood Industry enjoys a Zack's Industry Rank of #32.
Within the Building Products/Wood Industry of eight companies, there have been 5 recent positive revisions to annual earnings estimates and 0 negative revisions. Positive estimate revisions have been averaging +15%. Admittedly, there are also a couple of sour earnings surprises to report too. *** Plum Creek Timber (NYSE:PCL)
PCL is a Zacks Rank #1 (Strong Buy). It moved up from a hold just last week. This publicly-held timber REIT reports quarterly earnings on April 29, 2013. The lumber, plywood, and medium density fiberboard (MDF) producer offers an annual cash dividend of $1.68 which yields a nice 3.2% return, and showed us a recent +69% Q4 earnings beat. Plum Creek Timber is the second largest private timberland owner in the United States, with approximately 7.8 million acres of timberlands located in 19 states. Their timberlands are well diversified, not only by species mix, but also by age distribution.
Weyerhaeuser Co. (NYSE:WY)
WY is a Zacks Rank #1 (Strong Buy). It was bumped to its #1 rating within the last week. It reports earnings on April 26, 2013. The producer surprised on its Q4 EPS with a +37% beat. Weyerhaeuser Company is principally engaged in growing and harvesting timber; the manufacture, distribution, and sale of forest products; real estate development and construction; and other real estate related activities. Its business segments are timberlands; wood products; pulp, paper and packaging; and real estate and related assets.
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Scooped by
Prentiss & Carlisle
January 23, 2013 3:57 PM
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The Ontario Securities Commission announced Tuesday the extension of the trading ban on Sino-Forest Corp. 's(SNOFF) securities until the regulator's fraud allegations against the timber company are settled.
The OSC first introduced the ban in August 2011, alleging the Canada-based company, whose assets are mainly in China, and five of its former executives fraudulently exaggerated the value of the company's timber assets. Sino-Forest conducted an internal investigation into the allegations, but executives have denied fraud.
In the wake of the allegations and trading ban, Sino-Forest in March 2012 sought bankruptcy protection to restructure, and that court process is largely set to end sometime this week.
In an statement issued Tuesday, the OSC said the trading ban was extended "until the final disposition of the matter related to the statement of allegations, including, if appropriate, any final determination with respect to sanctions and costs."
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Scooped by
Prentiss & Carlisle
October 30, 2012 10:29 AM
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Overview - Improving housing markets combined with good demand and pricing for wood products have resulted in better-than-expected earnings for U.S. timber real estate investment trust (REIT) Potlatch Corp.
- We are revising our outlook to stable from negative and affirming all existing ratings, including our 'BB' corporate credit rating.
- The stable rating outlook reflects our expectations that improving housing and lumber markets will result in Potlatch's leverage declining to 4x over the next several quarters.
Rating Action
On Oct. 29, 2012, Standard & Poor's Ratings Services revised its outlook on Spokane, Wash.-based Potlatch Corp. to stable from negative. At the same time, we affirmed all existing ratings, including our 'BB' corporate credit rating on the company.
Rationale
The outlook revision and affirmation reflects our improved view for Potlatch's EBITDA performance in light of recovering housing markets and better than previously anticipated wood products segment earnings. As a result, we now expect Potlatch's leverage to decline to approximately 4x at year end 2012 and be maintained below 4x in 2013.
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Scooped by
Prentiss & Carlisle
August 30, 2012 6:36 PM
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Based on our analysis of probable mid-cycle EBITDA ($330-340MM) and a 6.5X multiple, we believe that $14 represents reasonable “fair value”. LPX is NA’s largest producer of OSB with ~20% mkt share. It’s possible to make an argument for a higher valuation based on more disciplined behavior by OSB producers. However, given the disappointing financial record of the OSB industry (including LPX) over time, we believe that investors should take such arguments with a grain of salt. At current levels, we think LPX stock is fairly valued. Downgrade from Buy to Hold.
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Scooped by
Prentiss & Carlisle
July 23, 2012 9:35 AM
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Potlatch (Nasdaq:PCH) has been upgraded by TheStreet Ratings from hold to buy. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Scooped by
Prentiss & Carlisle
July 5, 2012 8:12 AM
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We have recently upgraded the long-term recommendation for The St. Joe Company ( JOE ), a publicly held real estate company, from Neutral to Outperform, primarily due to its strong future growth prospects.
Based in Jacksonville, Florida, St. Joe is one of the largest real estate developers of Northwest Florida. Over the years, the company has developed successful residential and commercial projects and related infrastructure, which in turn has attracted regional and national businesses to the area that contributed to the regional growth and prosperity.
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Scooped by
Prentiss & Carlisle
July 2, 2012 5:21 PM
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Plum Creek Timber (NYSE:PCL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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Scooped by
Prentiss & Carlisle
January 15, 2012 9:33 AM
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Scooped by
Prentiss & Carlisle
December 22, 2011 8:27 AM
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Scooped by
Prentiss & Carlisle
December 17, 2011 5:28 PM
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Keweenaw Land Association (KEWL.Pink Sheets) Price: $76 (12/13/2011) - note this is an extremely illiquid stock, small trades can really move the stock price. A bit back I did a post on investing in Timber and got some great ...
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Scooped by
Prentiss & Carlisle
January 23, 2013 3:59 PM
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Diversified forest products REIT Potlatch hit a 52-week high on Jan. 17, recording robust returns and a long-term expected growth of 5%.
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Scooped by
Prentiss & Carlisle
December 21, 2012 9:46 AM
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The IndexIQ Global Resources ETF (NYSEARCA:GRES), the first global resources hedged Exchange-Traded Fund, has received a 5-Star Overall Morningstar RatingTM and a 5-Star Three-Year Morningstar RatingTM as of November 30, 2012 out of 22 funds in the Natural Resources category, it was announced today.
“The last three years have seen tremendous growth in demand for commodities worldwide”
Introduced on October 27, 2009, GRES is the broadest commodities and natural resources ETF, including: livestock; precious metals; grains, food and fiber; energy; industrial metals; plus timber, water, and coal. It is based on an index with over five years of live history, designed to reweight its allocations to individual commodity sectors monthly. The fund is diversified both geographically and by sector. We believe GRES offers a unique and market proven methodology and has been among the highest performing ETFs in the commodities and natural resources category during its more than three years of live history, as well as exhibiting among the lowest levels of volatility in its category.
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Scooped by
Prentiss & Carlisle
October 25, 2012 10:27 AM
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The rating on China Forestry Holdings Co. Ltd. reflects our view that the company's financial strength and business sustainability will remain vulnerable over the next year. The rating also reflects China Forestry's weak and deteriorating liquidity and heightened information risk stemming from alleged accounting irregularities. The company's business risk profile is "vulnerable" and its financial risk profile is "highly leveraged," in our view.
We expect China Forestry's cash balance to continue to diminish over the next six to 12 months because we anticipate that its operating cash flow will be negative. The company's cash balance dropped to Chinese renminbi (RMB) 632 million as of June 30, 2012, from RMB809 million as of Dec. 31, 2011. Nevertheless, we expect China Forestry's cash balance to be sufficient to meet the US$18.5 million interest payment on the company's senior notes that is due in November 2012 and May 2013.
China Forestry faces significant risk in business recovery due to its poor asset quality, limited operational capability, and management uncertainties. The company had material write-offs on its assets, and impairment losses on receivables, prepayments, and inventory. It recorded an operating loss in the first half of 2012 because limited harvesting led to a significant decline in sales. In addition, weakening industry demand in a context of China's slowing economic growth pushed down timber prices.
A downstream wood processing business that China Forestry acquired in April 2012 was loss-making before the acquisition, and the visibility on the entity's turnaround is low, in our view. China Forestry's acting CEO resigned in the first half 2012 and the chairman/founder took over as CEO.
The allegations of accounting irregularities will continue to negatively affect China Forestry even though the company has released its financial statements. This is because China Forestry's new auditor has cited numerous scope limitations in the financial statements and did not express an opinion. We expect China Forestry's access to the capital markets to remain extremely limited. Trading in the company's stock is still suspended.
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Scooped by
Prentiss & Carlisle
August 1, 2012 10:20 AM
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Deltic Timber Corporation (NYSE:DEL) has been upgraded by TheStreet Ratings from a hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Scooped by
Prentiss & Carlisle
July 17, 2012 10:43 AM
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Shares of timberland owners Plum Creek Timber Co. Inc. and Weyerhaeuser Co. traded higher on Monday, after an analyst said a proposed sale of 1.9 million acres of timberland is a positive for the two companies.
Hancock Timber and Molpus Woodlands announced last week that they would buy the land from Forest Capital Partners. The transaction represents the biggest timberland sale in the U.S. in six years, Citigroup analyst Anthony Pettinari said in a research note.
The size of the deal suggests that the market for timberland is showing signs of life, after years of far smaller transactions — and that's a positive for Plum Creek and Weyerhaeuser, Pettinari wrote.
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Scooped by
Prentiss & Carlisle
July 5, 2012 7:54 AM
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Timber REITs are favored as a medium-to-long-term play on a housing recovery with large, liquid companies that have good balance sheets and pay a dividend.
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Scooped by
Prentiss & Carlisle
January 25, 2012 10:48 AM
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The St. Joe Company (St. Joe) is a real estate development company. The Company owns approximately 577,000 acres of land concentrated primarily in Northwest Florida. St. Joe is engaged in town and resort development, commercial and industrial development and rural land sales. It also has interests in timber.
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Scooped by
Prentiss & Carlisle
December 22, 2011 8:47 AM
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Years ago, I held shares in Crown Pacific Partners, a timberland-owning firm headquartered in Portland, Oregon. During market declines in the late 1990s, the firm subsidized its shareholder distr...
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Scooped by
Prentiss & Carlisle
December 21, 2011 10:38 AM
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While the media is hyping Tuesday's better-than-expected housing starts numbers as a surprise, the reality is that homebuilder exchange traded funds have been...
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Scooped by
Prentiss & Carlisle
December 4, 2011 8:23 AM
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"Even though Weyerhaeuser's business isn't as concentrated in timber as some of its competitors', there are a number of other reasons I like the company better than the other timber REITs as an investment."
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