John O'Connell, CFAWeyerhaeuser CoWYWEAK BUYSep 10, 2012

It's rallied 10% int he past month. The biggest owner of timber; the housing sector will rally when interest rates start to fall.

Is down only 2% in the last 3 days when the markets have tanked much worse. The Fed will cut interest rates, which benefits WY. Adjusted EBITDA rose 16% in Q2 over previous quarter.

Lumber is a boom and bust industry and lumber prices and stocks are slumping. WY is cleaning up its balance sheet and growing its 2.9% dividend. They also have issued special dividends. They have a long-term plan, so you're good to ride out near-term choppiness holding this. But don't buy before they report on July 25, because numbers may not be good. Wait till after, though that can be risky too. A tailwind would be lower interest rates, because they would stimulate home-buying and home-building, which needs lumber.

Merely okay. Lacks the big dividend. Prefers Home Depot.

WY-N vs. IFP-T. WY-N often looks the most expensive at the bottom of the cycle. It does not have great momentum. It beat on the recent quarter. Its balance sheet is okay. He would prefer this to, for example, IFP-T. He would not buy either until earnings come in.

A name that is leveraged to the strength in the global economy. Traditional timber morphing into value added products, etc., but at the end of the day in many cases, it is going to depend on a strong economy. There is also some concern about the state of global trade. He likes that it has a decent dividend yield. A little bit off the radar of most investors. A good hedge on inflation going forward.

(A Top Pick June 16/16. Up 16.28%.) This is wood. It pays a 4% dividend. He wants exposure to the US housing market. The housing stock is way under historical averages.

Excellent company, high quality timber in North/South America, New Zealand and Australia. You want to hold for the long term as long as REIT regulations don’t change in the US.

He is constructive on commodities and likes wood. This company has been working for years to get out of the unprofitable areas of wood. It’s timberland, wood, levered to housing and non-residential construction in the US.