Louisiana Pacific Corp (LPX-N)

Earnings are sort of catching up to the stock. It is selling at 29X PE ratio, which is not exactly a giveaway. Earnings forecast has been rocketing upwards, but that would still call for a downside risk of about 22%. If it doesn’t hold here, it is going to take a step down. To him, this has an abyss in front of it.

Has always stayed away from the OSB market. The business has been consolidated, and very much like the commodity business. A lot of people got very excited about the housing market, but consumers are not going to go to that great big bump like we saw in the early 2000’s. Doesn’t think it is going to be a huge growth business.

A very levered play on the housing market. Housing starts has been hovering around 1 million per year, whereas a normalized run rate would be 1.5 million. At some point he expects housing starts to improve. This company specifically makes building products, and more specifically oriented strand board OSB. Down around 30%-35% from about a year ago. This gives you big swings. He would recommend going into something that is a little more stable.

(Market Call Minute.) This would be a Hold at best. The lumber market is rolling over and housing in the US is slowing down a little. Doesn’t see a lot of upside.

(Top Pick March 14/13, Down 24.25%) He kept some other housing names.

Positively predisposed towards this sector for the next year or 2. There is a bit of a North American super cycle going on in terms of the right segments of forest products. The stock has had a huge, huge run, especially last year. This has been subject to profit taking and has gone sideways for the last year. Would probably be a buyer at the bottom of its trading range.

(A Top Pick Jan 22/13. Down 16.21%.) This one got ahead of itself because of OSB (oriented strand board). When you look at OSB and the production and residential construction, you have seen this one come back in the last few weeks. This is a long-term hold. He is still buying more shares. Will have some volatility, so Buy on dips.

Just acquired Ainsworth Lumber (ANS-T). Likes this sector quite a bit. Like a lot of other forestry stocks, had a huge, huge run over the last years and is now having a bit of a correction. Thinks this is a Buying correction on the way to higher highs. You have to remember these are cyclical stocks so you have to watch every quarter

Feels there is going to be a strong growth in the US housing market. Companies like this should do well. It probably got ahead of itself and has pulled back. The issue you face with any kind of lumber company is that they are highly cyclical. You need to Buy when the market is in its dire straits and Sell when things are really rosy. Feels the housing market is in the 1^st little bit of where it is going to go to in the US. Expect some volatility with this.

Forest products and fairly well-positioned. One of the few resource sectors that are working right now. Produce a lot of fibre which is an area that he has a very positive outlook on for the next year. You have to be a little careful. A cyclical stock that has doubled in the last year. This pull back is now a buying opportunity.

One of the largest OSB (oriented strand board) companies along with Norbord (NBD-T). Very much likes the OSB space and is a good way to play housing. OSB prices have been very, very strong because of strong demand from homebuilders. (See Top Picks.)

One of the largest producers of oriented strand board (OSB) and wooden panels for housing construction. Also, manufacture wood siding and engineered wood products. All the data in the US points to a sustained housing market recovery. This will convert into stronger earnings and cash flow.

One of the biggest strand board producers in North America. Have done really well, obviously because of the US housing recovery. He has struggled whether he should Buy or not. The issue is that as the price of OSB goes up, there is a lot of spare capacity out there and many will get restarted. He questions how disciplined the big producers will be bringing them back. He doesn’t know the answer. He needs more confidence.

OSB (oriented strand board) play. OSB is used for short-term things such as hurricane Sandy, reroofing, construction, etc. Bull market should extend well through 2016, as timber supply “shocks” start to be felt. Shortness of supply is driving a longer-term trend.