Canfor Corp. (CFPZF)
One of my favorite ways to find new stock ideas is to steal them from a couple of my favorite mutual fund managers. Aegis Value Fund is one of my two favorite mutual funds. (Fidelity Low Priced stock fund being the other.) So this next purchase of mine directly came from a recent purchase by that fund. And they give a good explanation of why they picked the stock in their advisors report...
"Another company we have found attractive to purchase in the past six months is Canfor Corporation. We have invested $4.5 million in this leading Canadian forest products company. The Canadian softwood lumber industry has been buffeted by a strong Canadian dollar, declining homebuilding activity in the U.S., and a larger than usual supply of lower-quality wood resulting from a mountain pine beetle infestation. We believe the company has sufficient balance sheet strength and management capability to see its way through the current storm. The balance sheet strength will be bolstered substantially by the Softwood Lumber Agreement that is set to be finalized this quarter. Once effective, we estimate the company will receive close to C$500 million after-tax in tariff refunds. The balance sheet as of June 30, 2006 did not reflect the vast majority of this C$3.50 per share cash infusion. To put the size of this refund in perspective, the stock has recently been trading at about C$11.50 per share. The
Softwood Lumber Agreement is likely to improve margins at Canfor in the mediumterm. However substantial margin improvement will only be achieved when lumber prices stabilize and the market more fully adjusts to recent events and higher Canadian exchange rates.
While the near-term conditions in the lumber market are challenging, Canfor’s mills are relatively well-positioned and efficient. Its costs are lower than many of its Canadian competitors in Quebec, who have been first to shut capacity. Canfor is also diversified into U.S.-based production, providing some hedge against adverse Canadian conditions. We expect it may apply its strong balance sheet and tariff refunds partly to increase its proportion of U.S.-based production. The housing market downturn may provide some good buying opportunities in the U.S. While the next few quarters are likely to prove challenging, we believe the company maintains the ability to generate strong cash flows in coming years."
The company is right now trading at C$10.50. I bougth 1100 shares @ $8.95 (us dollars). Also, I bought 15,000 more shares of Partygaming $.59. That brings my total exposure to Partygaming to 38,000 shares at around $.62.
A good site to track the progress of the number of players at PartyPoker is PokerScout. It seems the number of players at PartyPoker is increasing nicely. The 7 day average of the number of cash players was around 3800 a couple weeks back. Now it's around 4400. Pretty good.
"Another company we have found attractive to purchase in the past six months is Canfor Corporation. We have invested $4.5 million in this leading Canadian forest products company. The Canadian softwood lumber industry has been buffeted by a strong Canadian dollar, declining homebuilding activity in the U.S., and a larger than usual supply of lower-quality wood resulting from a mountain pine beetle infestation. We believe the company has sufficient balance sheet strength and management capability to see its way through the current storm. The balance sheet strength will be bolstered substantially by the Softwood Lumber Agreement that is set to be finalized this quarter. Once effective, we estimate the company will receive close to C$500 million after-tax in tariff refunds. The balance sheet as of June 30, 2006 did not reflect the vast majority of this C$3.50 per share cash infusion. To put the size of this refund in perspective, the stock has recently been trading at about C$11.50 per share. The
Softwood Lumber Agreement is likely to improve margins at Canfor in the mediumterm. However substantial margin improvement will only be achieved when lumber prices stabilize and the market more fully adjusts to recent events and higher Canadian exchange rates.
While the near-term conditions in the lumber market are challenging, Canfor’s mills are relatively well-positioned and efficient. Its costs are lower than many of its Canadian competitors in Quebec, who have been first to shut capacity. Canfor is also diversified into U.S.-based production, providing some hedge against adverse Canadian conditions. We expect it may apply its strong balance sheet and tariff refunds partly to increase its proportion of U.S.-based production. The housing market downturn may provide some good buying opportunities in the U.S. While the next few quarters are likely to prove challenging, we believe the company maintains the ability to generate strong cash flows in coming years."
The company is right now trading at C$10.50. I bougth 1100 shares @ $8.95 (us dollars). Also, I bought 15,000 more shares of Partygaming $.59. That brings my total exposure to Partygaming to 38,000 shares at around $.62.
A good site to track the progress of the number of players at PartyPoker is PokerScout. It seems the number of players at PartyPoker is increasing nicely. The 7 day average of the number of cash players was around 3800 a couple weeks back. Now it's around 4400. Pretty good.
posted by Amit Dhuleshia at 9:28 AM
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