Norbord Inc (OSB.TO)

Oriented strand board is the equivalent to plywood, when they put the panels together. The softwood lumber dispute could actually be positive for this company. A lot of their plants are in the US. This is a way to get your toe into the housing market. They just tripled the dividend. Dividend yield of 3%. (Analysts’ price target is $46.50.)

An Oriented Strand Board producer which is primarily used in housing construction. Kind of a play on US housing, and even China where they export to. Tends to be a very cyclical play. Prefers using less cyclical names.

It is related to the home building sector About this time of the year lumber and home builders pick up. But normally it is delayed into the new year. He held off. He sees a positive trend and now a pullback trend. Look for it to pull back from where it is as a positive sign.

It is slowly ticking higher because of the US housing recovery and will do this for the next 1 to 2 years. This company will have issues with the softwood lumber agreement. He would accumulate.

CIBC downgraded this on the basis of 1) the street was overly ambitious on cash flow and EPS, and 2) a US company potentially has a slopping production from one plant to another. If they went to 2 plants, that would put pressure on the OSB pricing. Until the whole softwood trade deal is completed, he would forget this.

A good company. It got an attractive offering. The bad news is that we are not seeing the household formation, and housing starts were running at only about 1.1 million in the US, down from 1.4 million. Young people are urbanizing and want to live in the cities rather than the country or the suburbs. This is good, but not great.

This has been doing much better lately, so it isn’t of interest to him anymore, and is not on his watch list.

This stock always comes down to one thing, where is the pricing for Oriented Strand Board going. This company dominates that market. They pay out a good chunk of their earnings in dividends. He has a bit of a problem with seeing OSB prices going higher from here. If you have made a profit, he would be inclined to Sell some of your position.

(Market Call Minute.) Good story. Thinks the quarter is probably going to be better than people expect. All of the stocks are starting to gain some momentum here.

(Market Call Minute) He likes the housing cycle and it is hard not to like this one.

Their product is OSB, primarily used in new homes for roofs and floors. Overall he likes the prospects for US housing starts continuing, as well as renovations, but prefers to play it through Interfor (IFP-T), Western Forest Products (WEF-T) or West Fraser (WFT-T).