Stockchase Opinions

Glenn MacNeill, P.Eng.Fibrek Inc.FBK.TOTOP PICKDec 18, 2003

This is a bet on pulp prices. Pulp has a good chance of doing very well next year. US election is a large consumer of paper and it is an Olympic year, another large consumer.
$7.73

Stock price when the opinion was issued

Forestry
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DON'T BUY
Has exposure to NBSK (Northern Bleached Softwood Kraft) pulp. Is unhedged, so if you are bullish on the Cdn$, it would be good. Not sure where pulp prices are going, so doesn't own. Also concerned about their input costs on woodchips. If pulp prices improve, he might have a different view.
DON'T BUY
A pulp mill in Quebec. Has a couple of issues. 1) Pulp pricing has not been vibrant due to competition out of South America/Asia and 2) Quebec has cut the allowable timber cut.
DON'T BUY
Have avoided this one because they don't like deeply cyclical plays. Some risks, but OK if you want to take a chance on the price of pulp.
DON'T BUY
A cyclical. Will be volatile. Distributions will rise and fall.
DON'T BUY
A very good mill and a low cost producer. A single asset type of trust with some volatility, so if anything should go wrong with that facility, they won't have cash flow. Demand for pulp has gone up and prices are near their cyclical highs.
TOP PICK
(Past top pick Feb 5/04. Up 13%.) Expects pulp prices to move higher and distributions will be increased.
TRADE
In an industry that has a history of being very volatile.
WEAK BUY
Pulp has been battered for the last few years so they had to cut distributions. Recently, we have seen the commodity bottom. Looking for a price increase which will benefit this company. Pulp demand is going up.
TOP PICK
Pulp prices have been low. chip prices have risen. Chip prices are moderating. Pulp prices may rise 15-20%
DON'T BUY
Highly cyclical. Canada is becoming less competitive in the global market in exporting pulp.
TOP PICK
A bet on pulp prices. The pulp market is starting to turn around. At a low point.
DON'T BUY
Has a one plant operation in Quebec. Have concerns because of the rising Canadian dollar. Have already cut distributions once. May have to cut them again.
BUY
Abitibi will be receiving some of the distributions, which will cut the amounts received by shareholders. The share price is now an attractive buying opportunity for a 3 to 5 year holding.
DON'T BUY
Not a fan of the pulp commodities. Highly cyclical. A lot of competition.