The time is right for beaten-up Canadian forestry stocks

By David Berman
The Globe and Mail
June 5, 2019
Category: Business & Politics
Region: Canada

Are Canadian forestry stocks set for a rebound? Some brave investors are betting that the worst is over, given tentative rallies earlier this week. …Nimble investors can point to several upbeat signs for the beaten-up sector, including tumbling borrowing costs that could stimulate U.S. home construction. Shares have also been pummelled over the past 12 months, making the downside risks look relatively slight. But perhaps the best thing going for forestry stocks: The potential returns are huge if investors get the timing right for this notoriously cyclical sector. The last time forestry stocks rallied, from mid-2016 to mid-2018, West Fraser shares surged 170 per cent. …Paul Jannke, a principal for Forest Economic Advisors… expects that lumber prices could rebound as much as 40 per cent this year. …Mr. Jannke warns that more curtailments are needed… rising home sales and drier weather will spur demand. [To access the full story requires a Globe & Mail subscription]

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