What are you buying today?

[Paarslaars]

Must have misunderstood you then, seems like we're on the same page. 

My bad.

[Ross812]

On 2/5/2024 at 9:30 PM, Castanza said:

Yeah not sure either….haven’t seen any news regarding the acquisition and not sure we’ll hear anything till next earnings call. Hopefully some more insider buying shows up soon. 
 

1% position for me currently so figured I’d average down a bit. 
 

 

Some of HQIs staffing segments are in a recession right now. Warehouse staffing levels are a leading indicator, question is does the trend reverse? Also, Look into how they manage their workers comp. I'm comfortable with it, but they are taking some lumps right now. Next quarter could be rough.

 

The company that is managed well and is a good long term hild. With that said, I've been trading around a 4% core position. Bought down to $12.50, sold some at $16, buying more now. 

 

 

[aws]

I own a decent amount of PSH as well. The way I've looked at it is, the discount to NAV is basically enough to zero out the 1.5% management fee. Meaning the accretive aspect of the buybacks and dividends at such a big discount replace the NAV that is spent on the fee. I'm not sure what I would do with the position if the discount narrowed significantly, but that's unlikely to be an unpleasant scenario.

[thepupil]

this is similar to how I view things, with a little help from low cost leverage and discount, a buyback/divvy reinvestment of 3% of NAV more or less cancels out the fees such that gross return should be quite close to the net return. 

 

this is why a consistent divvy/buyback is so important with discounted NAV vehicles. it acts as a self-correcting mechanism by which the discount allows for accretion to offset other factors which weigh on NAV growth. It does not guarantee a closing of the discount but does help with per share value growth.  

 

 

Edited February 7, 2024 by thepupil

[Viking]

CFP.TO

 

Back under C$15. Canfor is trading at about $250/1,000 board feet of capacity. West Fraser recently made a purchase at C$900/1,000 board feet. Not really an apples to apples comparison but i think it is at least a little instructive. Time to dust off my old files on lumber companies.

 

US just increased duties on Canadian softwood lumber. Canfor was hit especially hard; that is likely what is causing the stock to sell off more than peers. Higher duties just might cause the permanent closer of capacity in central BC to accelerate - which would be supportive of higher prices down the road. Something to monitor. 
 

It is pretty much a given that central banks will be cutting rates, likely around mid year. What sector should benefit the most? Housing.
 

Demand: Canada has a serious housing shortfall. My guess is the US also will need to increase the amount they are currently building in the coming years.

 

Supply: lumber production will continue to decline in BC. Yes, it will continue to increase in the US South. Higher imports of lumber from Europe could be a risk; something to monitor. But an increase in new housing starts might start to tighten the market. It will depend on how much new home starts increase as rates start to come down.

 

Why Canfor? It looks to me to be the cheapest of the big boys. West Fraser is the best managed (IMHO). This is a trade for me; not a long term hold.
 

The problem? No near term catalyst. Might be dead money for a while. And the stock could continue to fall. I view it as a 6-12 month hold/trade. I am in no hurry. 
 

The payoff? Lumber is one of the most volatile commodities. Up and down. If a catalyst shows up the whole sector will rocket higher.

 

Interfor releases earnings after close of business Feb 8. Probably will not be great. 

Edited February 7, 2024 by Viking

[Red Lion]

6 minutes ago, Viking said:

CFP.TO

 

Back under C$15. Canfor is trading at about $250/1,000 board feet of capacity. West Fraser recently made a purchase at C$900/1,000 board feet. Not really an apples to apples comparison but i think it is at least a little instructive. Time to dust off my old files on lumber companies.
 

It is pretty much a given that central banks will be cutting rates, likely around mid year. What sector should benefit the most? Housing.
 

Demand: Canada has a serious housing shortfall. My guess is the US also will need to increase the amount they are currently building in the coming years.

 

Supply: lumber production will continue to decline in BC. Yes, it will continue to increase in the US South. Imports of lumber from Europe could be a risk. But an increase in new housing starts might start to tighten the market. It will depend on how much new home starts increase.

 

Why Canfor? It looks to me to be the cheapest of the big boys. West Fraser is the best managed (IMHO). This is a trade for me; not a long term hold.
 

The problem? No near term catalyst. Might be dead money for a while. And the stock could continue to fall. I view it as a 6-12 month hold/trade. I am in no hurry. 
 

The payoff? Lumber is one of the most volatile commodities. Up and down. If a catalyst shows up the whole sector will rocket higher.

 

Interfor releases earnings tonight. Probably will not be great. 

Do you do these swing trades in a tax advantaged account? 

[Viking]

2 hours ago, RedLion said:

Do you do these swing trades in a tax advantaged account? 

Yes. Tax free compounding is the 9th wonder of the world. Much better than the 8th (compounding that is taxxed). In Canada we have so many good options: TFSA, RRSP, LIRA, LIF

 

RESP to pay for kids education.

And now FHSA for first time home buyers.

 

Time + tax free compounding, and pretty soon you are talking about real money. 
 

Young kids in Canada have never had it so easy to get financial independent. I suspect most will largely miss it - by not getting on it early. 

Edited February 7, 2024 by Viking

[maplevalue]

More Scottish Mortgage Trust

[fareastwarriors]

BTI

[Dinar]

40 minutes ago, fareastwarriors said:

BTI

I'd be careful here.  10% volume declines in the US business are serious business.  I was hoping that it'd stop in 2023, but it has continued in 2024.  

[CorpRaider]

CMCSA, PARA, WBD

[RichardGibbons]

6 hours ago, Viking said:

Supply: lumber production will continue to decline in BC. Yes, it will continue to increase in the US South. Higher imports of lumber from Europe could be a risk; something to monitor. But an increase in new housing starts might start to tighten the market. It will depend on how much new home starts increase as rates start to come down.

 

One other potential wrench is the likelihood of the provincial government giving Indigenous people a veto over forestry use. This is under consultation now, and I wouldn't be surprised if it moves ahead this year.

 

A court decision back in 2021 resulted in the same thing for parts of Alberta and northern BC. I know someone who works in forestry up there, and that decision has led to Indigenous people extorting the lumber companies. On top of that, the government is clawing back rights to privately manage forestry land to transferring those rights to First Nations tribes.

 

As a result, the lumber companies up there have stopped harvesting on government-own land for the last couple years.

 

So, to sensibly model BC lumber companies, I think one probably has to dramatically reduce both volume and profitability for at least five or six years. Since it's a competitive global market, I think there's a decent chance it'll kill most of BC's forestry industry. In any case, one would expect margins in BC operations to be much lower in perpetuity than the past and increased risk.

[Eldad]

2 hours ago, Dinar said:

I'd be careful here.  10% volume declines in the US business are serious business.  I was hoping that it'd stop in 2023, but it has continued in 2024.  

US Combustible is what 30% of sales? I would think that is more than priced in at this price. 

[Dinar]

4 minutes ago, Eldad said:

US Combustible is what 30% of sales? I would think that is more than priced in at this price. 

If I am not mistaken, the US business is 50% of EBIT, and I would guess that 90-95% is cigarettes.  

[Eldad]

2 hours ago, Dinar said:

If I am not mistaken, the US business is 50% of EBIT, and I would guess that 90-95% is cigarettes.  

That looks to be correct. So call it 48% of the business is melting on a volume basis while still providing higher profits annually. 52% is growing in volume and profit. Non-combustible reaching profitability this year and growing quickly. 6x earnings still seems more than priced in. 

 

[Dinar]

19 minutes ago, Eldad said:

That looks to be correct. So call it 48% of the business is melting on a volume basis while still providing higher profits annually. 52% is growing in volume and profit. Non-combustible reaching profitability this year and growing quickly. 6x earnings still seems more than priced in. 

 

Don't forget there is a lot of debt, if I remember correctly, L 40bn, now you do have a stake in ITC that is worth around L 15bn, but if you look at it on EV/EBIT basis, the multiple is not cheap 6x EBIT or 8x post tax.  

[Dinar]

Fairfax this morning at the open

[Spekulatius]

Also bought just a bit of PARA so I stay interested in the soap opera. Added a few shares of PM premarket (earnings looked alright to me).

 

I bought a starter in KWS.DE (seed company) as well on a weak earnings report. They did keep the annual forecast but we will see.

[Spooky]

Also Fairfax

[KJP]

William Penn Bancorporation

[tnathan]

42 minutes ago, KJP said:

William Penn Bancorporation

SMART - this is going back to book when they start buying back all the shares

[Mick92]

FFH

[mjm]

2 hours ago, Spekulatius said:

Also bought just a bit of PARA so I stay interested in the soap opera. Added a few shares of PM premarket (earnings looked alright to me).

 

I bought a starter in KWS.DE (seed company) as well on a weak earnings report. They did keep the annual forecast but we will see.

what's you thoughts on SDF?  kinda same business. nice balance sheet.

[Spekulatius]

55 minutes ago, mjm said:

what's you thoughts on SDF?  kinda same business. nice balance sheet.

SDF - Kali & Salz is a totally different business (salt mines). They are a high cost producer in this commodity space (Belarus and the Canadian potash mines are low cost producers) so I don’t think it’s an attractive business.

 

KWS is family controlled and it’s the 4th largest seed producer in the world and the only publicly traded pure play. It’s a unique business with lots of IP and deep barriers to entry. KWS plows 18-19% of their revenues into R&D . The third largest seed producer is the French Vilmorin and they went private a year or so ago.

[sleepydragon]

FRFHF

sold at 820, now back in at 920 

 

last time when I sold at 820, my pregnant wife was so angry she almost want to kill me.