Weyerhaeuser Co (WY)

(A Top Pick Jan 17/14. Up 5.9%.) Still likes the company. This was a bit of a unique situation because it is a lumber producer, timberlands and they also own a large US homebuilder. They were divesting that homebuilder and he thought it would give a bit of a lift to the stock. Still likes it.

Would fall into the category of housing related stocks, and as US housing improves, this is poised to do very well. They own timber land, lumber business and oriented strand board. Doesn’t screen quite as cheaply as some of the Canadian lumber companies so he has focused on Canadian companies.

Has a calculated NAV of roughly $36, and would look to buy at $29. Looking at forward earnings, free cash flow and some of the things they have done structurally, they are focused on one thing, being the largest owner of timber and forest land in North America. 2.7% dividend yield.

(Top Pick Jan 17/14, Up 0.81%) Waiting for the next leg in the US housing market. They are vertically integrated. One thing holding back the US housing market is the ability to qualify for mortgages. For those who went bankrupt in 2007, the 7 years to clean credit record is almost up.

A bit of a unique play, because they own a significant amount of timber lands in North America, largely in the US. Benefit when US housing starts continue to increase. On a valuation basis, it has not run as hard as some of the other lumber stocks. Dividend yield of 2.83%.

This is a leveraged play on the state of demand for housing in the US. Bear in mind that it is very, very operationally leveraged so if it starts to slow down it is not one you want to be in.

If you are going to go forest products, he would prefer to focus on timber companies, as opposed to those with paper and cellulose exposure. Prefers International Forest Products (IFP.A-T) and others. There are a number of them that look quite attractive. This is a REIT as they took their assets and put them into a REIT format so the payout is going to be higher but he would prefer a lumber company. 3% yield.

Owns, harvests and sells lumber. Has an OK dividend yield. Investors have piled into the housing market trade and a lot of these housing stocks are incredibly richly valued right now. New housing starts are still at a pretty subdued pace. Longer-term it will be a positive. But he doesn’t know if the 3% plus dividend yield is enough to keep investors involved.

Has pulled back from prior highs this year because interest rates have trended up and there is a kind of slow down in housing activity.

(Market Call Minute.) This whole play on the housing recovery is getting pretty extended. Good dividend yield but he doesn’t think you need to chase it.

Thinks they are poised to benefit. They did a deal today to raise equity. They are confident in the housing recovery. Timberland has been a good long term asset for WY-N. He might pause because there is a lot of selling in this one.

US housing has effectively been driving forest products stocks. If you are looking for a buying opportunity, you might wait until we see something like last fall where there was a meaningful pullback.

It could probably push up a little higher. It could come back to $26-$27. Relative strength is getting up there. You probably use a low from a week ago. He’d rather see it come back and test the $28 level. Reasonable dividend. Just over 2% dividend.

One of those structural plays that capitalizes on short-term tightness in lumber supplies as well as the housing recovery. Have had huge contracts and really know how to negotiate contracts and lock in prices. This one is just starting to get warmed up compared to other companies.

Feels there is a housing recovery that can play out for a lengthy period of time. This is as good a place to play it as any. Decent dividend of around 2% or so. He would look at some of the homebuilders and play it that way. Be careful how much you put into this. Has had a pretty big rally and there is no need to chase it.