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Gold/Mining/Energy : Copper Fox

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From: louel4/3/2020 12:58:29 PM
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I picked up a bunch of Western today at 60 cents and will add if it drops further. Trading 30% below fair value target 1 year is between 1 to $1.40 by any analyst. Dividend yield If I remember right somewhere between 12 and 14.8% Horgan gave the Company the monopoly on as much of the highest priced fiber on the west coast of BC Western red Cedar and Cypress. The company has the only six only mills on the Island which can cut the logs into lumber. Both of those species cannot be exported other than in lumber or ready for market form. Raw log export is denied if they can be profitably manufactured in the province.
The company price drop was largely due to the 8 month long strike now settled. Financials are i good shape and has among the highest rated management in the industry.

The CEO Don Demons was born into the sawmill industry into a family owned sawmill which was located under the Second Narrows bridge. CFO Stewart Williams formerly CFO of Interfor took the company from aan adams lake and another mill in the fraser valley to the Third largest Canadian forest company prior to being hired by Brookfield Asset management to come over to work with Western after they assumed it out of bankruptcy in 2008.
I have placed a subsequent order lower just in case it spikes down. WEF trades as you can see 1 to two million shares daily. It would not surprise now that WEF has ample timber going forward and not affected by the beetle epidemic, to see one of the majors or Jim Pattisson purchase WEF It has six fully modern mills an Canada and one in Washington plus a reman plant in Arlington Wa. both of which bypass US tariffs.
Secondly the New Union contract covers the next five years of operation. And the US department of Commerce says it intends to reduce the import duties on Canadian lumber from 20% to 4 % in mid August. Another Boon for WEF's profit line.

There has been a share buy back program in place which has reduced the outstanding float by near 20 million shares and is still ongoing. Former high was $3. Based on the float reduction alone without the added production facilities it would equate to a share price near $4.25 when the economy recovers.

That is also in line with normal forestry industry bull market trading values which has historically for over fifty years been 1.8 X BV per share Lumber unlike Oil and coal is one product which is not trying to be made obsolete People will always want homes. And in China or other Earthquake zones it is far superior to brick and mortar.

As s I'm in the dividend will help the wait. Always do your own research prior to making any investment decision.

That said I am not an investment adviser and never recommend any buy or sell It is your money and your decision If I have made errors in my assessment please feel free to point them out I'd appreciate it
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