Canfor Corp (CFP.TO)

One of his two plays on housing in US and growth in China and Japan. He might be a bit reluctant to buy today.

This space is very cyclical and very volatile. Where we are now in the cycle, this is a good place to get exposure. They can generate a tremendous amount of cash flow.

Warmed up to housing play some time ago. This is the premium participation in the area. Risks would be if 2-5 year interest rates started to go up. There is a pent up demand for new housing.

He sees a continuing recovery in US housing. There is huge pent-up demand from “cellar dwellers”, kids that lived with their parents and setting up for a down payment. There is also immigration demand. Also, there is growing demand in China and Japan. He sees a continuation of the boom out to 2015-2016. Target price of $26 in 12 months.

2^nd largest lumber company in North America. Likes its exposure to the US housing market which he feels will rise from 950,000 up to 1,500,000 over the next several years.

Canadian softwood is really ideal for construction and there really isn’t any competition. A better name would be West Fraser (WFT-T) but this one is a good name. A good way to play the housing trade.

Seems to have support at its current level. The longer-term trend line is fairly intact. It momentarily blipped through the $17.50 or so level but it seems to be holding that. Probably not a bad entry point. If it breaks the $17.50 area, be careful because there’s not a lot of support until you get way down to the $13 area.

Predicated more on US growth than China. If demand for housing picks up to a million and a half housing starts, this will be the driver. China could be a surprise in addition.

As a leading North American paper and forestry product, he thinks there is upside in this name. Has North American exposure which means they are directly tied to both the Cdn and US housing sector. Housing continues to be built in the US which is creating a lot of demand for forestry products.

He is pre-disposed to the housing trade. Likes the lumber trade in general. Likes the bigger players. You could buy on a pull back in the group.

(A Top Pick March 27/12. Up 62.99%.) Sold his holdings in the last couple of months and switched his money into Interfor (?) another Canadian lumber company.

Because of some of the structure there will continue to be a tightness in OSB (oriented strand board) markets and demand will drive this for the next 12-24 months.

Forest stocks are all riding a real burst of optimism, particularly in the housing market. This one is not cheap. Be aware that you are kind of riding closer to the speculative end of the valuation spectrum.

He is warm towards lumber stocks right now. (See Top Picks.)