West Fraser Timber (WFG.TO)

He looks for trend reversals. He thinks this one might pull back a dollar of two from here before buying. He is looking to buy at $70 or below. There is a potential for $80 next January or February and he has an exit point of $67. It found good volume at its bottom. (Analysts’ price target is $84.50)

Lumber stocks and home builders in the US have a stock chart like this one – plunging down to the right. At these levels, the valuations are suggesting a depression is coming – he does not believe in this. His downside target is $66, so based on his model, it is a buy if the market can find a bottom soon.

It peaked in early June and fell to $80, breaking a strong 19-month trend. The early-August low fell along with commodoties as a whole. It'll likely continue to fall.

Forest stocks have come off due to U.S. trade issues under Trump, which has added US$7,000 to the cost of a US house. This is a good time to buy this.

With all the lumber tariffs, he wouldn't get into this space. However, there's been a lot of home building that lumber companies have enjoyed. Current valuations are high. If there was a market setback, this space would be vulnerable. The BC fires have spiked the stock price, but the fires can eat into the supply areas.

Earnings recently were very positive. Unfortunately lumber prices have recently collapsed. It is a cyclical company, but is a very good one. With the strength of the US and Canadian economies, he thinks this is one of the best in the sector, and would continue to hold it for the next year.

It's not the kind of company he invests in. It's a great Canadian resource play and has done well, but the issues are Trump's tariffs on Canadian lumber and disappointing U.S. housing starts.

It's testing support levels where it's been before and volumes are lifting--both positives. The low-80s is support. The consolidation is healthy.

Merger with Canfor? Cheap, well-run, but there’s softwood lumber deal risk. Market has already reacted to the softwood deal. They’ve heard M&A speculation, but unlikely with Canfor. Not a lot of M&A in public companies, instead, companies just buy smaller US mills. Outlook very strong, and upcoming earnings should be good, especially given strong lumber prices.

There are restrictions on Canadian exports of lumber. Lumber futures just hit a record high. Party of it has to do with demand. Never short anything just as it is going up even if the valuation makes no sense. Wait for it to peak and is in the down trend.

Large company, 6 billion dollar market cap. Year over year earnings are up 100% and next year earnings estimates have been revised upwards in the last 90 days. (Analysts’ price target is 87.86$)

This has very strong seasonality. Historically it has done very well from approximately October right through until approximately February of each year. That doesn't work all the time. In 2016, we started to get into squabbles with the US on tariffs, etc. His chart shows it is working again this year. On a seasonal basis, it’s time to be an owner right through until the end of February. Technically it’s in a trading range right now. A move above its resistance at around $80 would be a very positive indication that seasonality will continue right through until about the end of February.

(Market Call Minute) Be careful. It trades at 2.5 times book. You should buy it when there is blood in the streets. They are 50% above the 20 year average.