Stella-Jones Inc. (SJ.TO) Buy, Sell or Hold

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Stella-Jones Inc. (SJ.TO)

70.00

+0.67 (0.97%)

as of Sep 22, 2026, 8:00:00 pm Market Open.

206 watching

BUY

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

SJ reported revenues of $710 mln and EPS of $1.03. This beat estimates of $706.7 mln and $0.78 respectively. The company is expecting utility poles to grow by 20% annually into 2024. Utility pole revenue was up 29% this year quarter largely driven by pricing. Overall this looks like a solid quarter at first glance.
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PAST TOP PICK

(A Top Pick Mar 29/22, Up 36%)

A leading producer of railway ties and utility poles. New utility poles will be needed (double digit growth), including the fire-resistant ones that they developed a few years ago. It has a great balance sheet, lots of cash and is raising the dividend. A defensive growth stock trading at 12 X earnings.

BUY

Boring business (utility poles and railway ties). Very strong dividend. Has been performing well in terms of business. Good ling term prospects (infrastructure growth will require products.

PAST TOP PICK

(A Top Pick Nov 01/21, Down 8%) An infrastructure play. He thought SJ was well-positioned for this, but such stocks are very sensitive to cyclical downshifts. He is holding on, because he still believes there will be government infrastructure spending.

TOP PICK

Their last 3 quarters beat sales expectations. So, he bought this in August. He sees more quarters of outperformance and easy comps, due to a 14-month downturn which saw shares dive. They've since rallied nicely beyond their moving averages. It's a good, multi-year compounder that's competitive in a consolidated industry. (Analysts’ price target is $49.14)

BUY

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Stable business despite lumber prices. Railway business should see recovery. Acquisitions expected in near term. Trades at discount to history; premium to peers.

BUY ON WEAKNESS

Negative in 2021. Recently, it's been going up as the market's been going down, and this is a positive sign. Broken its downward trend. Wait for a month or so to get in, around $37.50.

WEAK BUY

Great company. Leader in rail ties and utility poles. It's about finding the sweet spot of prices for products being down, but demand is high. Perhaps a good time to get in with inflation peaking. He'd look at other names.

DON'T BUY

Has owned them before, not now. Very good returns in the mid/high-teens, but they're tied to cyclical lumber. See better opportunities elsewhere. That said, it's a strong company, but doesn't meet his returns metrics.

PAST TOP PICK

(A Top Pick Jun 23/21, Down 17%) Core position of portfolio. Is very defensive position. Most sales recurring (railway ties etc.). Residential lumber business continues to grow even after the pandemic boom (people renovating homes etc.). Returning capital to shareholders through dividend increases and share buybacks. Share prices very low and presenting good buying opportunity.

Unspecified

Makes railroad ties and utility poles as well as re-selling lumber and value added products. Ties and poles have to be replaced so it is a stable business. Previously owned it then sold it pre-Covid. The CEO retired and there was insider selling. The price hasn't really moved anywhere.

PARTIAL BUY

Well managed for many years, focused on railway ties and have expanded into wood products, but got caught up in the lumber price downturn. That hit the stock. Also, exports to China has declined due to Covid there. Lumber is in a cyclical downturn, so this is a tough call. Share have fallen into the mid-30s. The value remains, but market momentum will remain negative to 6-8 months. But this fear may be baked into shares now.

BUY

Sell Vermilion to buy this? He entered this starting last year, because of its lumber business. SJ is a ply on infrastructure, say building ports which need lumber. The stock has trailed since late last year, but current PE is attractive. He would add to this long term. After the current mess in the economy, there will be infrastructure spending.

BUY ON WEAKNESS

It has broken the technical support level and the downside is behind it. There is a trading opportunity at $35. It has a strong fair market value and a 2% yield.

BUY

Enjoys a duopoly. Their lumber business saw a pandemic bump as people renovated their homes. SJ is still growing in lumber to pre-pandemic levels. Shares have fallen, because it's seen as a Covid stock, but it trades at a cheap 11x earnings and generates big cash flow. Are buying back shares and raising dividends. You can't get safer than this and will enjoy demand in providing utility poles as there is more green energy added to the grid. (Analysts’ price target is $52.31)

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Stella-Jones Inc. (SJ.TO)