Opinions James Telfser
Western Forest Products Inc.WEF.TOCOMMENTJun 17, 2015
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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He likes this a lot. Have been struggling because they have been exposed more to exporting a lot of specialty products to China. Haven’t bounced back as fast as the other players. Prefers Interfor (IFP-T), which is doing a lot more on the acquisition front in the US. In this part of the cycle, he is seeing lumber prices get back to $300. Having a lumber exposure in your portfolio is going to be key because they are still cheap in this part of the cycle.