CFP, RFP, WFG, IFP and GFP: 5 best TSX lumber stocks to buy?

Be the First to Comment Read

CFP, RFP, WFG, IFP and GFP: 5 best TSX lumber stocks to buy?

More on:
CFP, RFP, WFG, IFP and GFP: 5 best TSX lumber stocks to buy?
Image source: © 2022 Kalkine Media®

Highlights

  • Lumber prices approached the US$ 1493-mark in early March but eventually fell again to around US$ 874 in April.
  • Canfor (TSX: CFP) and West Fraser (TSX: WFG) are gaining some attention on the stock market after recording profits in their Q1 FY2022 results.
  • Interfor (TSX: IFP) announced that it bought a minority stake of 16.2 per cent in GreenFirst Forest Products (TSX: GFP).

Canfor Corporation (TSX: CFP) and West Fraser Timber Co. (TSX: WFG) are gaining some attention on the stock market after recording profits in their first-quarter results for fiscal 2022, mainly due to favourable lumber prices during the quarter.

After plummeting by over 36 per cent year-on-year (YoY), lumber prices approached the US$ 1493-mark in early March but eventually fell again to around US$ 874 in April. Lumber prices were around US$ 1039 as of May 3. Some investors may see lumber stock as a viable option to earn short term gains. That said, let us look at five TSX forest stocks to benefit in the future.

1.     Canfor Corporation (TSX: CFP)

Canfor Corporation recorded sales of C$ 2.21 billion in the first quarter of FY2022 against C$ 1.57 billion in the previous quarter and C$ 1.94 billion in Q1 2021. The Canadian softwood company saw its net income at C$ 534 million in the latest quarter, notably up from a loss of C$ 23.1 million incurred in the previous quarter.

CFP stock plunged by over 19 per cent year-over-year (YoY). However, according to Refinitiv, CFP stock breached its support level in April and now seems to be trending upwards with a balanced Relative Strength (RSI) value of 55.63 on May 3.

2.     West Fraser Timber Co. Ltd (TSX: WFG)

West Fraser Timber reported sales of US$ 3.11 billion and a profit of US$ 1.09 billion in Q1 FY2022. Considering the transportation disruptions in western Canada this year, the company dropped its SPF shipment expectations to about 2.8 to 3.0 billion board feet for 2022.

WFG stock zoomed by nearly 21 per cent in the past 12 months. It can be said that WFG stock has been attracting investors as its RSI value improved to 65.24 in the last one month.

Also read: Restaurant Brands (QSR) sees Q1 revenue surge to $1.45B. Time to buy?

3.     Resolute Forest Products Inc (TSX: RFP)

Resolute Forest owns a 50 per cent equity stake in Resolute-LP Engineered Wood Partnership since March 4. Additionally, the company will exclusively distribute wood products produced under the partnership.

RFP stock jumped by over 22 per cent in the last nine months. The forest stock had an RSI value of 65.98 on May 3 as per Refinitiv.

4.     Interfor Corporation (TSX: IFP)

Interfor Corporation announced that it bought a minority stake of 16.2 per cent in GreenFirst Forest Products Inc (TSX: GFP) for a total consideration of C$ 56 million on May 2.

IFP stock currently held an RSI value of 59.97 (according to Refinitiv) and swelled by over 46 per cent in nine months.

5.     GreenFirst Forest Products Inc (TSX: GFP)

GreenFirst Forest Products is a Canadian company engaged in forest management and lumber production to provide for industrial sectors. Stocks of GreenFirst Forest surged by almost 11 per cent on May 3 in the light of Interfor’s transaction.

GFP stock grew by over 24 per cent in the past six months. As per Refinitiv, the RSI value of GFP stock also increased from 25 to 52.52 on May 3.

 CFP, RFP, WFG, IFP and GFP: Are these 5 TSX forest stocks a buy?

Bottomline

Some investors might see fluctuations in lumber prices as an investment opportunity. However, climate and economic conditions are some factors that one must consider before investing in such forestry stocks.

Also read: NTR and IFOS: 2 Canadian fertilizer stocks to buy amid potash deficit

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

Disclaimer

Speak your Mind

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK