Acadian Timber Corp (ADN.TO)

A couple of years ago, the whole plan was to utilize their Brookfield relationship to expand and make acquisitions and make this a much bigger player. That has been slow to come to fruition, but is still very much possible in terms of what they could and could not do. Has some Eastern Canadian and US exposure. It depends largely on housing and construction, but with their Brookfield relationship, there is still plenty they can do. A patient, waiting game, but a nice little company while waiting.

The most important thing in lumber is that it looks like they are going into another softwood lumber agreement. US Forest companies are big landowners and have a big lobby. We were saved last time, because Asia started importing a lot of our West Coast trees, so the company sort of skated on side. Asia is having its own problems right now, so figuring out what the volume should be, having a softwood lumber agreement on top of it, along with our low currency really impacts these companies as to what the probability is. It should be a great time for these types of businesses.

We are in a sort of strong move right now for timber stocks. Chart is really nice showing a rounded bottom. There is a good chance it is going to make a little handle and form a “cup and handle”. If you own, continue to hold and see if it can break the high at around $21.

Brookfield owns 45%. The rumour has always been that at some point in time they want to grow this and make it a big company and maybe make it another Brookfield timber publicly traded entity. A good play on the US housing market. Dividend yield of 5.33%.

He has owned it in the past. It is well run. They have timber assets in Eastern Canada. The upside is really figuring out how Brookfield will combine them with their own underlying timber operations over time.

(A Top Pick May 22/15. Down 0.67%.) Still looks good and lumber is a dominant theme, so if you own, continue to Hold.

(A Top Pick Nov 11/14. Up 25.54%.) Still likes this and the sector it is in. The trend is higher, so it is a good stock for an investor.

Thinks this is buyable right now, but in the context with the forestry sector. He is always a little cautious about recommending a long-term investment in a cyclical sector. They have done very, very well over the last couple of years. Has a nice association with its parent Brookfield with all sorts of plans to make nice acquisitions. They are based on the east coast which gives them an advantage.

It benefits from the increased housing starts. It is illiquid. 5% dividend.

The reason to own this is if you believe the US housing market is normalizing and will show more growth, the Canadian housing market continues to show good growth along with demand from Asia. He sees potential for these companies to show more growth. The Cdn$ is dropping, which makes the price of lumber more attractive. There is potential for rising dividends. A good place to be.

Hitting a new 52-week high today. Thinks this works higher. An overlooked stock, which is a good sign.

He thinks they have a broader acquisition strategy. Right now it is going to languish for a while, and will be challenged for the next 3-6 months. PE of about 16.85, and dividend yield of about 6.2%. Has a target price of around $14.50. Put this on your radar screen for 4^th quarter 2014.

Got absolutely slammed in 2008-2009 when nobody was ever going to build houses again. He holds this just for yield. Doesn’t expect a lot of growth. This is a multi-year recovery story in housing prices and he thinks the demand for lumber is going to continue unabated.

Has had underperformance in the last year plus. This is in a market where most of the forest products have been on a tear. On a company this small and having this kind of performance, he would be very cautious on it.

Can’t speak of the stock directly but can generally speak about the sector in that all the stocks have had a similar story. Has been a selloff of late because of questions on US housing. Sees this is a very volatile sector in a nice uptrend. He wouldn’t be too concerned about any selloff. Looking out to 2014-2015 he expects there will be some good value in these names. Prefers International Forest Products (IFP.A-T).