Opinions Andrey Omelchak
Western Forest Products Inc.WEF.TOBUYFeb 24, 2017
Andrey OmelchakStock 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 great Canadian company that specializes in different species of wood that are unique. A well run operation that allows the company to switch production from one species to another. They do this in the interests of optimizing the profitability of the company. Located in BC which gives them access to their plantations. They’ve invested quite a bit of money in trying to optimize operations further, and those initiatives have very high paybacks attached to them. The concerns are all around the softwood lumber agreements and how negotiations will proceed. This is a big question that is still outstanding. Even so, this company is still interesting at these levels.