Stella-Jones (TSX:SJ:CA) has been a solid performer with a very stable stock over the past 2 years. The company provides utility poles, railroad ties and lumber for residential customers as a stable and slow growth business. I wrote about the company initially
Stella-Jones: Prudent Buy After Temporary Growth Slowdown
Summary
- Stella-Jones' shares are a buy after a 27% drop from recent all-time highs due to disappointing Q3 results and lowered 2025 guidance.
- Despite weaker guidance, long-term fundamentals remain solid, with shares trading at just 12 times 2025 earnings.
- The company is pursuing a sizable acquisition to drive growth, leveraging its 2.5x debt to EBITDA ratio.
- Lumber business could see upside in 2025 as interest rates drop, boosting renovation activity and lumber prices.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in SJ:CA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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