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

Stella-Jones Inc. (SJ.TO)

70.00

+0.67 (0.97%)

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

206 watching

COMMENT

He bought this 8 years ago, because he thought it was a simple business: rail ties and telephone poles. What could go wrong? Well, the replacement cycle of the latter is hard to calculate, and railways don't replace the former not often. Also, spiking timber prices hit this company. This is trading near 52-week lows. A good company and it should do well over time. But there were more problems here than he expected.

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The EPS beat estimates at 34 cents. Sales were 6% better than estimates at $545M. The dividend was also increased by 11%. Generally, the quarter was solid and guidance was good. The dividend bump gives further confidence. Unlock Premium - Try 5i Free

COMMENT

Used to own it. In 2022, industries like this will likely get ahead of the market. Tech stocks will fare poorly in the face of rising rates vs. stocks and industries like SJ.

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The stock has been trading horizontally for the past 5-6 years. Dividends have climbed steadily. Sales are growing and it is profitable. Valuation is decent, though EPS growth is muted. If they demonstrate solid revenues and EPS growth in the next few years, it could perform well. Unlock Premium - Try 5i Free

STRONG BUY

Even though lumber is a quarter of their business, utility pole replacement is a large part of their business along with railway ties. If you normalize lumber prices, the stock is trading at an all time bargain at 13x earnings, with lots of free cash flow and the company is buying back shares. They could boost the dividend if they wanted to and are looking at acquisitions. One of the highest quality stocks trading at great value. He owns it and would it to put it away.

BUY

Decimated today, as it revised EBITDA down. Stock's so cheap and company's so profitable, it's a great time to buy. Huge surge in profits last year. High quality. Lots of room to grow the dividend. Back in acquisition mode. Long-term hold.

TOP PICK

They have a lumber business, pressure treated, in addition to utility poles. We are going to see massive build-outs in terms of ports and so on and this will benefit SJ-T. There will also be a need to increase the building of homes. (Analysts’ price target is $53.69)

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The stock was upgraded to outperform this week by an analyst at Scotiabank. Price target by another analyst at TD was cut from $56 from $57. The stock has popped 10% following the upgrades. Unlock Premium - Try 5i Free

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BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. A buy for investors with patience. Growth might slow next year, but the valuation is still interesting at 11x earnings. A well-run company with a decent history. Not very exciting. Insiders have been buyers. Keep an eye on debt levels. Unlock Premium - Try 5i Free

TOP PICK

Residential lumber exploded last year. Stock's come way down and has never been cheaper. Trading at 12x earnings for a great company with great cashflow. Significant room to bump up the dividend. Great time to buy a well managed, quality company. Yield is 1.62% (Analysts’ price target is $60.00)

DON'T BUY

This is a growth by acquisition company that specializes in railway ties and has now expanded into utility poles. These are pretty mature markets. You want a combination of acquisitive growth and organic growth, so there are better opportunities elsewhere.

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The fundamentals remain strong and business is stable. Their focus is on railways and utility poles where they enjoy a strong market share. Lumber prices are off recent highs. Continues to have a good long term outlook on the stock. Unlock Premium - Try 5i Free

PAST TOP PICK

(A Top Pick Mar 27/19, Down 19%) They're part of a duopoly. It enjoys highly recurring revenues. SJ shouldn't be impacted by the virus, just in their lumber segment. Strong balance sheet. More acquisitions to come for them in the pole side. The stock hasn't been this cheap in a decade. Trades at 13x earnings and has room to grow its dividend. A slam dunk.

HOLD

A pretty boring company and will grow over time. They make good acquisitions and have set themselves up properly. They are not expensive but debt is a little too high. It will not disappoint you over the next 10 years but never excite you, either.

DON'T BUY

He sold his shares, tired of disappointing earnings. They ran into inventory and costing problems.

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Stella-Jones Inc. (SJ.TO)