Opinions
Dennis Mitchell, CFA
Tembec Inc.
TMB-T
BUY
May 01, 2012
(Market Call Minute) Buy at $10.50.
$2.990
Stock price when the opinion was issued
east coast forestry
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DON'T BUY
It is a contrarian play. He would have thought there would be a turnaround by now in pulp and paper. The conversion of media and the move over to digital side seems to be a trend that has a long way to go. He looks for a company that has a temporary problem and can get back to where it was, but he is dubious about this one.
east coast forestry
BUY ON WEAKNESS
Downward trend is reversing. Some encouraging signs including a pickup in volume as well as breaking into new territory. Potentially $1.80 if it continues this way. A concern would be lack of volume until recently so could be difficult to trade. Probably get it at $1.40. If it breaks down below $1.30, you have to exit as it will then stay in the $1-$1.20 range.
east coast forestry
DON'T BUY
He likes the forest sector. This is more of an Ontario-based lumber producer with a dissolving pulp business along with some other assets. They have been burdened by a fairly high level of financial leverage, which would be something of a concern. Interesting to look at given Fairfax’s (FFH-T) recent stake.
east coast forestry