Here are some timber investing leads from a very successful reader.
One of the pleasures of my business is having really successful people who remain as readers for many, many years. In my dialogue with them I learn much more than they do! When such readers send me a message I listen carefully and follow up so I am passing on some thoughts on timber from just such a reader.
"Gary, Concerning timber: I have some well defined views. I do not like any of the U.S. timber trusts at this point. Nothing attractive in Norway/Sweden/Finland or South America right now. Surprise: The one Russian play went broke several years ago. I find the New Zealand timber funds/trusts somewhat interesting though the three favored are still generally a bit young in their cycle. Perpetual Trust manages two timber funds that trade on the NZSE: Nuhaka Farm Forestry Fund/NUH...trades around NZ$8.40, low debt, good discount to NAV with a little harvesting started in '99. Perpetual also manages the Opio Forestry Fund/OPI...trades at about NZ$0.52, no debt to speak of, nice discount to projected NAV, a young forest with harvesting expected in 2012. You will also want to take a look at Evergreen Forests/EVF..trades at NZ$0.50, some debt plus a convert. note (works out to be about 7.00%) that trades in NZ...and a US pink sheet ADR/ EFVSY. Depending on type of investor involved, all three could work..but be careful as they are very thinly traded because holders are buy and hold long termers. My favorite traded timber investment right now is the TimberWest Forest Corp Unit/TWFu.TO that trades in Toronto around CAN$12.00. They are the largest private forest owner in Western Canada!...Well managed, reasonable debt, working sweet cycle of forests, nice cash flow which they share with unitholders providing a decent current yield of around 9%. Take a look, you just might like it."
Until next message good global business and investing!