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Overvalued Timber REITs: No Improvement on the Horizon

WY just announced the sale of 140,000 acres at $2,142 per acre. PCL has been selling hundreds of thousands of acres at around the same price.. While I am interested in learning more about TIMO liquidations, I do think that timber companies view their businesses with a much longer time horizon. They don't generally grow a tree for 35 years only to chop it down and sell into a weak market. Also remember that a large portion of Weyerhaeuser's lumber goes to Japan and China via their Westwood Shipping Lines. Also remember that a lot of British Columbia's timber, won't exist in a few years. Read up on the pine beetle and the damage it's causing pine forests in B.C. I think much of your thesis is priced in. But please share more info on TIMO liquidations.

Clearwater Paper: An Undervalued Spin-Off

Awesome article. Very convincing. You've really done your work on this one, and it shows.

I also like IP, UFS, and WY. All are receiving alternative tax credits. The paper industry has been consolidating for a decade, and had finally brought capacity to a good level, with solid pricing power, just prior to the economic collapse last fall. Profits can really move up once we get a sustained recovery. The tax credits, in my opinion, are just icing on the cake. Most paper stocks aren't reflecting the value of these credits at all, probably because it is widely assumed they will be eliminated later this year. However, the value of these credits relative to market values of the companies receiving them is staggering, and the benefits of them will be felt far into the future as they are allowing for some serious debt repayments today.

Again, very nice article.