Opinions Michael Decter
Western Forest Products Inc.WEF.TOBUY ON WEAKNESSDec 20, 2013
Michael DecterStock price when the opinion was issued
As of Jun 04, 2026. Market Open.
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WEF has rallied with interest rates, which help the sector, but is still down 26% for the year and 37% over 52 weeks. Note the dividend was cancelled in November 2023 and none is paid currently. This week WEF announced it would be cutting production. It is still losing money. With its losses and outlook and omitted dividend and small size we would continue to be not interested here.
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Some insider buying. Trades at 0.16x sales, about half as much as CFP or IFP. Money-losing right now. Specialty wood products, typically higher margin and more profitable. But not anymore, related to housing market being slow. Cut dividend to protect balance sheet, so company's now pretty secure.
A great turnaround stock with upside once US interest rates come down and housing activity starts to come back. He's keeping a close eye on it.
Our view remains unchanged. The only recent news was that WEF had engaged in a partnership with a First Nations group where the Group would acquire a 34% interest from WEF in a limited partnership, for $35.9M. There is nothing exciting fundementally and it has small cap risks, so we continue to view it unfavourably.
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Still majority owned by the Brookfield group, who are exiting everything except real estate and maybe some of their renewable energy. With a big shareholder exiting, that puts a little bit of a cap on the price. If it gets up above $2, they may sell more equity. On the other side, this is a stock that benefits hugely from a rebound in housing and demand for lumber. He is likely to sell his warrants after Jan 1st and others may do the same. He would look for a bit of a dip and would only Buy if you have the tolerance for a lot of volatility.