The timing appears opportune to go long in shares of West Fraser Timber Co. Ltd. as we anticipate another pick-up in the underlying trend.
Summary
● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.
● In a short-term perspective, the company has interesting fundamentals.
Strengths
● The company returns high margins, thereby supporting business profitability.
● Thanks to a sound financial situation, the firm has significant leeway for investment.
● Historically, the company has been releasing figures that are above expectations.
● The company is one of the most undervalued, with an "enterprise value to sales" ratio at 0.65 for the 2021 fiscal year.
● Its low valuation, with P/E ratio at 3.19 and 7.94 for the ongoing fiscal year and 2022 respectively, makes the stock pretty attractive with regard to earnings multiples.
● Growth remains a strong point in this company. In their sales forecast, analysts sound optimistic with regard to sales prospects.
● Over the last twelve months, the sales forecast has been frequently revised upwards.
● For the past twelve months, EPS forecast has been revised upwards.
● For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
● Analysts covering this company mostly recommend stock overweighting or purchase.
● The average target price set by analysts covering the stock is above current prices and offers a tremendous appreciation potential.
● The tendency within the weekly time frame is positive above the technical support level at 64.68 CAD
Weaknesses
● The company is not the most generous with respect to shareholders' compensation.
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West Fraser Timber Co. Ltd. is a diversified wood products company. The Company is engaged in manufacturing, selling, marketing and distributing lumber, engineered wood products, including oriented strand board (OSB), laminated veneer lumber (LVL), medium-density fiberboard (MDF), plywood, particleboard, pulp, newsprint, wood chips and other residuals and renewable energy. Its products are used in home construction, repair and remodeling, industrial applications, paper, tissues, and box materials. Its segments include Lumber, North America engineered wood products (NA EWP), Pulp & Paper and Europe EWP. Its business comprises lumber mills, OSB facilities, renewable energy facilities, pulp and paper mills, plywood facilities, MDF facilities, particleboard facilities, LVL facility, treated wood facility, and veneer facility. The Company operates approximately 58 facilities in Canada, the United States, the United Kingdom and Europe. It also offers wood preservation services.