Stella-Jones Inc. (SJ-T)

EPS of 93c beat estimates of 71c; revenue of $730M beat estimates of $693M. EBITDA of $115M beat estimates by 6%. Sales rose 6.1% but EBITDA fell 4.2%. Railway ties showed strength, up 17%. Guidance was affirmed. Commentary was much more positive than we would have expected. The dividend was increased 11%. Things look good here, nothwithstanding current economic and other worries. It remains cheap at 12X earnings.
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SJ saw its price decline recently on weak earnings, and it has also been seeing some weakness alongside the broader markets. It trades at a decent valuation of 12.9X forward earnings, but forward growth estimates are in the low single digits, and analyst estimates have been trending lower. Regardless, it generates good free cash flow, has a decent debt profile, a growing balance sheet, and historical growth rates have been strong. While it could see further weakness based on tariffs and a weaker growth profile, we would be comfortable slowly averaging in here given its solid valuation, high drawdown (30% in the past few months), and long-term strength in management and fundamentals.
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Defensive growth at a reasonable price. He's not a trader, but this is the third time he's owned it. Leading NA producer of railway ties (a duopoly) and utility poles (pretty much an oligopoly). Really improved margins. Very strong balance sheet, buying back lots of shares, increasing dividend every year. 

Got hammered recently, as utility pole segment slowed. But there's a huge replacement cycle coming, plus expansion of the electrification grid. Poles will still be the main driver of growth. Great buying opportunity at under 12x earnings. Yield is 2%.

He sold as the technicals and RSI started to deteriorate. Broke down in the summer, has continued to trend downwards. Looks to be support around $65, and around $50. Really struggling right now.

Tough quarter after 3-4 year run of strong demand, with sales and margins increasing. That's taken some confidence away from management, blurred medium-term outlook. Wait for another quarter to see that there's not another leg down.

When things are going well, investors get excited. But when these semi-commodity names face tough times, the multiple can come way down.

Uptrend's just been broken. The last low in early 2024 was just below $80 and was broken, now at $71. Could base at some point, and that would be an OK time to buy. But right now, he wouldn't want to be in it.

Earnings not as good last quarter (recent for share price weakness). Overall - a strong business that is consistently profitable. Consolidation in sector will help. A great example of a cyclical growth company. Would recommend buying on weakness. 

Pulled back based on underlying demand. Businesses are pretty steady-eddy. Infrastructure buildout would help, but questions surround new US administration. Interest rates ticking up means home renos have ticked down. Don't step in here.

Hurricanes (needing lumber replacement) can't be predicted from one period to the next. Investors want to see predictable, recurring revenue and cashflow.

EPS was $1.42, missing estimates of $1.75; revenue of $915M missed estimates of $1.01B. EBITDA of $162M missed estimates by 12%. Lower sales of utility poles was the main reason for the miss. Updated 2025 revenue guidance was also below consensus estimates. Margins were weaker as well. Total sales fell 3.6%. Lumber sales fell 19%. Net income fell 27%. It was a big miss from a usually-reliable company. We would not react here, as the utility issue could be temporary. But certainly not a good quarter. 
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Owns shares, and will continue to own. Has taken partial profits, but has been considering adding more. Well positioned in utility poll business. Strong brand with excellent prospects. Climate change actually good for the business (replacements with disasters). Strong management tea with excellent return on equity. 

Large utility pole business. Strong performance resulting from increased power demand. Unsure of demand for products - would prefer utility providers (not components). 

Does own shares at this time. Likes company overall - building continues in Canada. A good company to watch. 

Likes basic materials in general, the WOOD ETF is performing pretty well. SJ is a special business. Good earnings  growth. He'd be comfortable owning here.

Not a monopoly, but biggest market player in railway ties and utility poles. Behemoth. Earnings beat today, solid results, net income up nicely, increased dividend by 22%. Shares dropped during today's conference call, due to commentary on "customer budget constraints". Still, US and Canada infrastructure spending to come.

Important business now, and will be going forward. Attractive multiple, very high returns, balance sheet quite strong. Likes it.