Opinions Benj Gallander
Western Forest Products Inc.WEF.TOCOMMENTMay 23, 2014
Stock 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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A well managed company. Balance sheet is great and revenues have been going up. Limited debt, under $100 million. Stock price has gone up quite a bit, but it is far less than it used to be. Thinks it could continue to do well. The forestry sector has had a wonderful recovery. You always have to watch the US and what the politicians there might want to do. You also have to watch housing in the US, which might be cooling a little bit. There is a big backlog of lumber in China right now, which might put a bit of a cap on sales. Instituted a dividend in the past year. When companies do this, they generally do quite a bit better over the next 2-3 years than the stock market as a whole. 3.5% yield.