Norbord Inc (OSB.TO) Buy, Sell or Hold

Norbord Inc (OSB.TO)

56.97

-0.69 (1.20%)

as of Feb 2, 2021, 9:00:00 pm Market Open.

34 watching

PAST TOP PICK

(A Top Pick Dec 14/17, Up 4%) They paid a special $4 dividend in the past year, but took a major hit right after. Also, US housing eased back; recently housing has come back. He's moderately bullish on U.S. housing. Demand is there, but finding land to build on and to build houses is challenging.

PAST TOP PICK

(A Top Pick Aug 22/17, Up 2%) It was frustrating until September. A very cheap stock. Just had a big beat. 5x cash flow, 3x EBITDA. Problem is that it's been caught up in the US housing slowdown. Now, it's too cheap to sell. Has terrible price momentum.

COMMENT

It has declined about 50% recently. They produce material for roofs and floors in homes. They have operations in Europe that is less cyclical than the North American business. This is tied to the housing markets.

BUY

He's owned it on and off and likes it. Well-run, great balance sheet and generates good cash flow. There are recent concerns of slowing housing in the U.S., but he puts that down to a labour shortage. Overall, the American economy is strong. OSB's correction now makes its valuation look attractive. He's optimistic. There is demand for homes.

DON'T BUY

They were doing okay as long as US housing was. Canadian business is almost irrelevant. You want to buy when it looks like new home construction is picking up. It is too early to look at this company.

BUY

It's getting quite cheap. The whole home construction sector looks like there's one part that is working well and another that is not. The latter stocks are all the stocks that came to a sticky end in 2008. These stocks are getting really cheap now and giving really good opportunities. These stocks could have a great run.

WEAK BUY

Is tied to housing starts and home prices. Possibly a combination of NAFTA and slower housing starts in the US, has caused it to come down significantly. Probably a good time to look at it at these levels. Is a high risk stock. There is potential to risk capital with this name.

SELL

Selling it literally today. It's a bad news story that he doesn't see getting better. He was patient, but now is moving on. It's down 19% YTD. The reasons are secondary; he doesn't see a turnaround.

PAST TOP PICK

(A Top Pick Oct 6/17, Down 16%) New home sales were turning down three months ago. Things were slowing down in the lumber space. These guys were impacted. It is trading reasonably priced and he sold it.

BUY

A whippy stock. A lot of supply is coming on, US housing has slowed a bit. The housing story is not over, it’s paused. $43 is not a bad level. Doesn’t know if it’s a stock you can own for 100 years, it’s cyclical, but it’s cheap now. Balance sheet’s great.

DON'T BUY

BAM.A-T divested a controlling interest in this position. They focus on OSB. There are trade tariffs showing up in the lumber space and concerns over the Canadian housing market. These will contain the stock in its valuation for the time being. The volume has come down in the US housing market.

BUY

The dividend can go up and down. The financial performance has been very, very strong recently. The business is very healthy and the outlook continues to be excellent.

COMMENT

Declared a large special dividend payable later this month. The stock has gone ex-dividend and the stock has dropped to reflect the amount of the dividend. There is no other reason for its recent, large drop.

HOLD

The special dividend increase got the stock moving up recently. The risk is that there is more capacity for the product is coming in the years ahead. A good business, but levered to the US housing market. He would continue to hold and is at a good support level.

BUY ON WEAKNESS

It was a top pick in its 20’s. It got to a level that he thought it was silly. Now the valuation is right. It came off with the latest data on housing.

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