Hardwoods Distribution (HDI.TO)

A lot of people want to play the housing market in the US and their recovery, which hasn’t really recovered the way people thought it would. Last year there were 900,000 new homes sold, and somewhere between 1 and 1.5 million new homes is a reasonable expectation. This company sells all the stuff that goes into new homes. They buy their stuff in Cdn$ and sells primarily into the US. It owns a ton of different distribution networks. Dividend yield of 1.31%.

One of North America’s largest distributors of renovation lumber. You won’t be too disappointed six months or a year from now. This is a correction.

Housing is a very long cycle. Having come off a huge bottom in 2007-2009, he sees a very long trend towards growth in the US housing market. 60% of this company’s business is distributing in the US. Dividend yield of 1.32%.

(All 3 picks are focused on benefiting from the US$.) This is in the business of premium hardwood. They have high margins. Home-improvement is going to be a big thing.

He would rather put his money into ECI-T. He has not taken a hard look at it.

They sell value added lumber products, mainly into the US to homebuilders. Small caps get hammered in a market correction, and this one has taken its lumps. Valuation is extremely cheap. Company has not disappointed on earnings in a long time. They should benefit in the drop of the Cdn$. A small cap, so don’t be aggressive. Maybe Buy part positions.

(Top Pick Oct 09/13, Up 31.11%) A big play on the housing market in the US. They are nowhere near normal levels. They have great exposure. Big fat margins and a great play on the US housing market.

(A Top Pick June 17/13. Up 53.58%.) Still likes this. Distributes wood products such as paneling for cupboards, flooring, etc. 70%-80% of their revenue is US based, so they are really positioned to benefit from an improving US housing and renovation market. Not an expensive stock.

(A Top Pick February 3/14. Up 12.2%.) Still likes it. The housing market is still in place.

(A Top Pick Feb 3/14. 6.67%.) This is continuing to do well. The thesis is still there. Getting into a little bit of a consolidation period right now and hopefully it will break out, which would be indicated at around $11 even. Stocks in uptrends tend to consolidate. This one has consolidated for quite a while at around $8.30.

A great business. Wood products that go into US housing. Some new and some reno. There is a 12 month lag between housing increase and HWD’s earnings being stronger. Thinks it will be a solid performer. Several years left in the US housing market recovery before a plateau.

A Canadian company with most of its business in the US. A play on the housing market and the pickup in the economy. Benefiting from the improvement in the US$. Use the 100 day moving average as an exit point. Yield of 1.4%.

Thinks there will be a million homes built in the US in the next 10 years. You want a lumber company if you believe the housing market is going to rebound. Low multiple of earnings.

Lesser known company, beneficiary of a US housing recovery. A distributor of lumber and specialty wood products. They sell to cabinets and flooring manufacturers, etc. A lagging indicator on US housing starts.