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 prospective high growth for the next fiscal years is among the main assets of the company
● The company is in a robust financial situation considering its net cash and margin position.
● The group usually releases upbeat results with huge surprise rates.
● The stock, which is currently worth 2021 to 0.91 times its sales, is clearly overvalued in comparison with peers.
● Its low valuation, with P/E ratio at 5.39 and 9.07 for the ongoing fiscal year and 2022 respectively, makes the stock pretty attractive with regard to earnings multiples.
● Upward revisions of sales forecast reflect a renewed optimism among the analysts covering the stock.
● Over the last twelve months, the sales forecast has been frequently revised upwards.
● For the last 4 months, the company has been enjoying highly positive EPS revisions, which were frequently and significantly raised.
● For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
● The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.
● Within the weekly time frame the stock shows a bullish technical configuration above the support level at 53.02 CAD
Weaknesses
● Stock prices approach a strong long-term resistance in weekly data at CAD 94.24.
● The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.
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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.
WEST FRASER TIMBER CO. LTD. 
