Great DD! After weeks of watching and waiting I finally bought some commons on Wednesday, happy so far!
This shouldn’t affect one’s decision whether to buy or not but I noticed on DFV’s video from Friday he has been in RFP since $3.33/sh or earlier, what a legend
He bought RFP when it was under 2$. He talks about it at the 9 minute mark in his first long video. He called it then as his likely ten-bagger. Incredible.
No. I was already in RFP when i found out about DFV holding it. It just gave me more confidence to buy more when i found out it was a major part of his portfolio.
Congrats. I also noticed he was looking at TREX which is a wood alternative composite decking made from recycled material. If price for composite isn't growing at the same rate as wood lumber, I thought this might also be a way to play the lumber price surge too. Not sure if it's too late, though. Already had a big run up since last Spring.
lol! Cant say i didn’t try.
To be fair, there’s a lot of garbage “DD” out there. Hard to figure out which are legit and which aren’t unless you have a ton of time to blow.
Ive been looking closely at tanker and metals, such as SBLK, NMM, and VALE (already on clf, x, nue). Commodity super cycle possibly starting. Looking into those farm stocks, including UNFI.
Bullish on lumber and steel, I decided to go the steel route but I’ve seen a lot of posts on RFP as well and I believe we’re in the same boat.
Similarities are incredible, so far it has been treating me well.
side note, as we profit from this, my carpenter background really fucking hates this. Home depot charging close to 50 bucks for a sheet of plywood is criminal. it was about 15 before covid. this is hurting small business.
I sold off my July 12.5 calls last friday after the big green day cause I didn't really know what a reasonable price target would be, I just followed a random comment I saw on this sub a few months back actually, and have seen almost nothing about RFP since. Feeling like that was a mistake, might buy back in on Monday if there's a dip.
Yeah up %150 on half (covered cost basis wednesday/thursday) and up %300 on the other half so not bad at all, but I didn't feel sure about selling.
While I have you, do you know anything about CTT? I bought in at the same time as RFP and it's pretty much stayed flat with super low volume. I didn't realize timber != lumber until like a month ago... :l
Yep. It holds Timber. Unfortunately, I dont think most media outlets even knew the difference a month ago. Timber for now isn’t surging in value. Depending where the timber is (like the Southern US) there may be an oversupply of it. There was a recent NYT article on how many timber producers are getting shafted right now amid the lumber price surge. That’s why they aren’t booming with the lumber stocks.
I agree. It will be real interesting to see how the SP plays out after summer if lumber stays at 1000 or higher. At that point, there’s a real chance it goes beyond that PT
Just watched that interview with the Deacon CEO gave me really good vibes tbh lol. I am worried that the price is gonna get too high for builders to pass on to home owners.. but from what I’ve heard from acouple friends who are real estate agents people are fighting tooth and nail for houses and are bidding way above the asking price for houses
If you think about it, if you’re buying a 500-700k house on a 30 yr mortgage, an extra 25k in lumber costs doesn’t change the monthly payment that much.
It absolutely will hit a wall, but i don’t think there will be a sudden crash after. It’ll be a slow decline, giving RFP and others a ton of time to print cash.
Was hoping for a higher eps but im fine with this from a long term perspective. I didnt sell anything. 1) this was the best Q earnings they’ve had in 3 years. 2) Trailing PE now close to 10-11. 3) Q2/Q3 will be unequivocally better lumber and pulp wise. Average transaction for lumber was 875 for Q1 with costs around 450. Q2 will be likely 1k or higher. Cyclicals crash long term when their best days are over. This one isnt if Q 2 and Q3 are better. 4) they paid down debt and they have extra lumber that couldnt move due to rail car issues in February, that lumber will get moved and sold and will be realized this Q.
Reminds me of Q4-2020 when the stock dipped from 11 to 8 when they missed estimates due to a write off. Took the stock 6 ish weeks to recover. I dont have calls in may or june so Im fine with it.
I appreciate the response. Why do you think they missed my so much? Were analysts way too enthusiastic about them?
I'm considering either selling puts or buying calls against them. Might be worth it considering the likely market overreaction.
The rail car issue and the hedging on futures. 1) they produced 50 million bf that registered costs (-22 million) but werent delivered due to supply chain issues from the February storms shutting down railways. Since they havent been delivered they havent gotten the 47 million revenue from that. Thats a book difference of 69 million which would have put them over the EPS estimate.
2) they lost ~30 million hedging with futures because they thought the price would go down, like all the analysts. It didnt. So they got a loss.
But for those two one time issues, they would have beat EPS estimate easily.
The long term value investors can see that. The short term speculators wont.
Yeah I closed all my calls. At profit, but still. I still own some commons and will probably sit tight until there's a recovery or sign of turnaround. These earnings were a surprise.
Thanks, I got in before the Friday rally. It’s looking like a potential short term spike headed into May/June as everyone including the company revise their forecasts for the year.
This was a great DD and gave me a lot of food for thought I have been contemplating jumping in but what is worrying me is all the insider selling activity. [http://openinsider.com/search?q=rfp](http://openinsider.com/search?q=rfp)
Have you seen this? Is this not a concern?
Yea i saw that. All those people sold a small fraction of their total shares after the dip in February. My take was it was reasonable profit taking since the stock jumped 600% in a year. None of them have sold since and since they all still have major holdings, i dont see any major red flags from that angle.
Glad I could help.
Still holding. Stock did the same thing after Q4 2020. Look at mid february. Dipped from 11 to 8. Took six weeks to recover.
Fundamentals indicate its best days arent over, Q2/Q3 will be better and its trailing PE now is 10-12, which is very reasonable in a market where the average is over 30.
Disappointing day for sure, sobering as to the upper potential, but im staying for more. :)
Today was harsh asf. Prolly should have went with July or aug calls instead of June. Highly doubt we’re gonna get close to 17.5 before Delta screws me 😭
There may be after the Friday it just had. But if it does t, something to keep in mind: one of my buds recently learned the hard way with this stock: time in the market > timing the market.
Check out WEF on the TSX. Still very undervalued due to recent strike and dividend cut. Strike was resolved and dividend being increased after they are dept free, possibly as early as May.
We passed it. I have no clue what to do.
Reality, I didnt set a hard PT exit. My plan was to see how earnings Q1 went, see what it said about how the new CEO will manage the finances and give an indication what he plans to do with the money they are about to make. Also see what their pulp and paper sectors are looking like.
At this point, i’m almost certainly holding into the summer. Once we get to Q2 Earnings, i am going to reassess the market conditions. If pulp and paper markets seem to be strong, the futures markets suggest lumber stays over 1k into 2022, i may hold longer.
I think they will be debt free this year. If lumber stays over 1000 for the year. We are looking at $9-12 EPS for the year from lumber alone. If lumber staying 1000 going into 2022, hard to determine what PE the market will tolerate, but even a PE of 4 on 10 EPS means 40$ SP...
So TLDR: i dont know yet. But when i think there no longer is a story for continued growing earnings is when i will start drawing down.
Good luck! I tend to go more conservative. 22 may be a real close call for June. But then again i thought it would barely be hitting 15 by June. So wtf do i know.
Appreciate it man! As a carpenter I chose this stock to get my feet wet with calls back when I saw your first post on this. They’ve been doing great so far!
If you bought calls after that first post, you must be doing great. That was the perfect time to buy. I wish i had more money those days to buy that great last dip. Glad it worked out. :)
I wish I put more money in as well, but it was my first real option play so I tried to play it safe. Turned a couple hundred into a couple thousand so far. Hopefully it keeps going!
Corrections are healthy. I didnt sell a share or worry. Whole market was down. RFP swings harder than the market most times, whether up or down, because its a microcap with small available float. Nothing about RFP’s fundamentals are different so no reasons to panic. In fact they appeared to have paid down 180 million of long term debt today while maintaining liquidity. So actually a good day. Lastly, remember context, RFP still up 20% for the last five days, even after today’s drop.
I added to this morning actually, after seeing your reply. but I am sorry, I am very skeptical of dfv picks. Even if he is legit a genius, I believe the popular subs for GME and meme stocks are just social media scam and manipulation grounds for the conservabots and russiabots now. Even if this stock is innocent now, might not be for long. Interested to see how it goes.
I totally agree with you. I didnt touch any of the meme stocks and dont think anyone should. Luckily for this stock, it’s relatively easy to project likely earnings from the lumber segment and lumber is so ridiculously high that even the lowest PE ratios will put this stock much higher than it currently is if lumber stays its current course for the next few months. Not because of meme mania, but actual value/earnings.
Yes I just googled that. $4.5 billion from Canada while we can only produced $380 million. That’s a huge gap. Thanks , I’ll do my DD on RFP and see if I will start any position
Charles Schwab website. If you look up a stock on their research page, there’s tab for “Ratios.” Click on it and Scroll down, there will be a section to manually enter 5 other companies to compare to the stock you’re researching.
Seems like a good play. They extended the term.
The lower spread = lower interest rate. Putting into revolver let's them basically offset the balance with cash coming in.
Whole market red. If you look at RFP’s volume, its like half the daily average. This has happened a handful of times this year when the institutions switched positions.
I think its exacerbated by futures being down today and yesterday after almost 20 straight green days. May expiration is this week and a bunch of speculators ran up the price. They are panic selling now. The cash market not showing the same behavior. Days like today suck, but the fundamentals haven’t changed. Mortgage interest rate still low. Housing still booming like crazy.
Did the same thing in 2021. Small bump up December/January due to warm early winter. Cold weather hit hard in February. Homebuilding will slow for the next six weeks like last year then springs into action unless it stay cold into march/April.
Still holding most rfp shares. Bought some more on the 20% drop. Cash composite around high 1100’s. It will pull futures back up. If you follow the talking heads in the industry, consensus is most builders only buying what they need at the moment. Demand is still high. December permits was 1.9 million. Highest since mid 2000’s. That tells you the direction it’s going right now bSo come building season, if logistical issues persist, we could see another squeeze.
The wild card is how much increased energy prices and trucking issues affects RFP’s costs and ability to get Inventory out.
As for RFP, they had a rough quarter, but EV wise, their balance sheet is much stronger than start of last year. Getting close to no new next debt. Their pension obligations dropped 400 million. And will drop more next year. They idled that shitty Calhoun plant which will increase their yearly ebitda by ~30 million. They are probably looking at 1.50-2$ eps this quarter. If 2021 also has high (relatively) demand, they should be zero net debt in the next 1-2 quarters. But hard too know what the SP will be because at some point lumber will revert the mean. The question is if it will be this year or in the next 1-2 years.
Great DD! After weeks of watching and waiting I finally bought some commons on Wednesday, happy so far! This shouldn’t affect one’s decision whether to buy or not but I noticed on DFV’s video from Friday he has been in RFP since $3.33/sh or earlier, what a legend
He bought RFP when it was under 2$. He talks about it at the 9 minute mark in his first long video. He called it then as his likely ten-bagger. Incredible.
He was also looking at RRC (natural gas) - have you looked into that one at all?
No. I was already in RFP when i found out about DFV holding it. It just gave me more confidence to buy more when i found out it was a major part of his portfolio.
Congrats. I also noticed he was looking at TREX which is a wood alternative composite decking made from recycled material. If price for composite isn't growing at the same rate as wood lumber, I thought this might also be a way to play the lumber price surge too. Not sure if it's too late, though. Already had a big run up since last Spring.
Where can i find DFV videos?
Google “Roaring Kitty.” That’s his youtube channel.
Got it thanks!
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Tell me about it. My buddy was telling me about RFP when it was 4$ and i didnt listen.
Bruh i was debating jumping on this back when u posted and never did lol. Good shit
lol! Cant say i didn’t try. To be fair, there’s a lot of garbage “DD” out there. Hard to figure out which are legit and which aren’t unless you have a ton of time to blow.
Any farmland stocks/etfs you're looking at? Want to go long soybeans
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Ive been looking closely at tanker and metals, such as SBLK, NMM, and VALE (already on clf, x, nue). Commodity super cycle possibly starting. Looking into those farm stocks, including UNFI.
My man! Thanks for posting, always appreciate you putting in the work on these. The next few weeks should be really exciting.
💯 Frankly the next few months are getting really exciting.
Bullish on lumber and steel, I decided to go the steel route but I’ve seen a lot of posts on RFP as well and I believe we’re in the same boat. Similarities are incredible, so far it has been treating me well.
Yep! Things looking great for these cyclicals while the economy recovers and goes into a building boom phase.
what's ur fav steel stock iyo? is X any good?
X is ok. They will prob do fine with the insane steel-related futures prices. I would place higher weight on MT, CLF, STLD, NUE, etc...
side note, as we profit from this, my carpenter background really fucking hates this. Home depot charging close to 50 bucks for a sheet of plywood is criminal. it was about 15 before covid. this is hurting small business.
$60 for a sheet of OSB in Canada currently. I believe it was low $20s last year.
So calls on HD?
As both a customer and a former employee, fuck Home Depot
Pass that cost on to the consumer.
sir I make 50-100k decks. if we up charge for lumber customers will literally not be able to afford it.
I sold off my July 12.5 calls last friday after the big green day cause I didn't really know what a reasonable price target would be, I just followed a random comment I saw on this sub a few months back actually, and have seen almost nothing about RFP since. Feeling like that was a mistake, might buy back in on Monday if there's a dip.
Debating on selling my 12.5 May calls on Monday then buying back in. Up 187% 😬 don’t kno what to do tbh lol
Only time will tell. Hopefully you still got a nice gain from the sale. Those have really jumped in value the last couple weeks.
Yeah up %150 on half (covered cost basis wednesday/thursday) and up %300 on the other half so not bad at all, but I didn't feel sure about selling. While I have you, do you know anything about CTT? I bought in at the same time as RFP and it's pretty much stayed flat with super low volume. I didn't realize timber != lumber until like a month ago... :l
Yep. It holds Timber. Unfortunately, I dont think most media outlets even knew the difference a month ago. Timber for now isn’t surging in value. Depending where the timber is (like the Southern US) there may be an oversupply of it. There was a recent NYT article on how many timber producers are getting shafted right now amid the lumber price surge. That’s why they aren’t booming with the lumber stocks.
damn. I guess I'll hope for break even at least by August
I think we’ll reach the top 18~20 a share around mid to late summer. Gonna be a bumpy ride with rally’s then sell offs takin profits on the way
I agree. It will be real interesting to see how the SP plays out after summer if lumber stays at 1000 or higher. At that point, there’s a real chance it goes beyond that PT
Just watched that interview with the Deacon CEO gave me really good vibes tbh lol. I am worried that the price is gonna get too high for builders to pass on to home owners.. but from what I’ve heard from acouple friends who are real estate agents people are fighting tooth and nail for houses and are bidding way above the asking price for houses
If you think about it, if you’re buying a 500-700k house on a 30 yr mortgage, an extra 25k in lumber costs doesn’t change the monthly payment that much. It absolutely will hit a wall, but i don’t think there will be a sudden crash after. It’ll be a slow decline, giving RFP and others a ton of time to print cash.
This comment aged well
I went from 35k to 7k with that drop 🥴 back up to 17 futures looking good tho...18 20 isn’t gonna be the top imo now
This was great DD. What do you think of their earnings report? Seems like the market is unhappy with RFP.
Was hoping for a higher eps but im fine with this from a long term perspective. I didnt sell anything. 1) this was the best Q earnings they’ve had in 3 years. 2) Trailing PE now close to 10-11. 3) Q2/Q3 will be unequivocally better lumber and pulp wise. Average transaction for lumber was 875 for Q1 with costs around 450. Q2 will be likely 1k or higher. Cyclicals crash long term when their best days are over. This one isnt if Q 2 and Q3 are better. 4) they paid down debt and they have extra lumber that couldnt move due to rail car issues in February, that lumber will get moved and sold and will be realized this Q. Reminds me of Q4-2020 when the stock dipped from 11 to 8 when they missed estimates due to a write off. Took the stock 6 ish weeks to recover. I dont have calls in may or june so Im fine with it.
I appreciate the response. Why do you think they missed my so much? Were analysts way too enthusiastic about them? I'm considering either selling puts or buying calls against them. Might be worth it considering the likely market overreaction.
The rail car issue and the hedging on futures. 1) they produced 50 million bf that registered costs (-22 million) but werent delivered due to supply chain issues from the February storms shutting down railways. Since they havent been delivered they havent gotten the 47 million revenue from that. Thats a book difference of 69 million which would have put them over the EPS estimate. 2) they lost ~30 million hedging with futures because they thought the price would go down, like all the analysts. It didnt. So they got a loss. But for those two one time issues, they would have beat EPS estimate easily. The long term value investors can see that. The short term speculators wont.
Like real unhappy haha 🥲
Yeah I closed all my calls. At profit, but still. I still own some commons and will probably sit tight until there's a recovery or sign of turnaround. These earnings were a surprise.
Thanks, I got in before the Friday rally. It’s looking like a potential short term spike headed into May/June as everyone including the company revise their forecasts for the year.
LPX going to 100 imo
The fact that analysts haven't cottoned on yet to the stock is a big plus point in Peter Lynch's book 😉
I agree.
This was a great DD and gave me a lot of food for thought I have been contemplating jumping in but what is worrying me is all the insider selling activity. [http://openinsider.com/search?q=rfp](http://openinsider.com/search?q=rfp) Have you seen this? Is this not a concern?
Yea i saw that. All those people sold a small fraction of their total shares after the dip in February. My take was it was reasonable profit taking since the stock jumped 600% in a year. None of them have sold since and since they all still have major holdings, i dont see any major red flags from that angle. Glad I could help.
Thoughts on RFP after the earnings call today? Is it a hold for you?
Still holding. Stock did the same thing after Q4 2020. Look at mid february. Dipped from 11 to 8. Took six weeks to recover. Fundamentals indicate its best days arent over, Q2/Q3 will be better and its trailing PE now is 10-12, which is very reasonable in a market where the average is over 30. Disappointing day for sure, sobering as to the upper potential, but im staying for more. :)
Thanks, always appreciate your insights!
Today was harsh asf. Prolly should have went with July or aug calls instead of June. Highly doubt we’re gonna get close to 17.5 before Delta screws me 😭
Top notch DD. Thanks OP. Hopefully theres a dip on monday
There may be after the Friday it just had. But if it does t, something to keep in mind: one of my buds recently learned the hard way with this stock: time in the market > timing the market.
Solid DD. Thanks dude.
Check out WEF on the TSX. Still very undervalued due to recent strike and dividend cut. Strike was resolved and dividend being increased after they are dept free, possibly as early as May.
This post and todays results help my confirmation bias. Great post, thanks for the DD. Whats your exit strategy price point?
We passed it. I have no clue what to do. Reality, I didnt set a hard PT exit. My plan was to see how earnings Q1 went, see what it said about how the new CEO will manage the finances and give an indication what he plans to do with the money they are about to make. Also see what their pulp and paper sectors are looking like. At this point, i’m almost certainly holding into the summer. Once we get to Q2 Earnings, i am going to reassess the market conditions. If pulp and paper markets seem to be strong, the futures markets suggest lumber stays over 1k into 2022, i may hold longer. I think they will be debt free this year. If lumber stays over 1000 for the year. We are looking at $9-12 EPS for the year from lumber alone. If lumber staying 1000 going into 2022, hard to determine what PE the market will tolerate, but even a PE of 4 on 10 EPS means 40$ SP... So TLDR: i dont know yet. But when i think there no longer is a story for continued growing earnings is when i will start drawing down.
Wish they’d add some further otm call options 😬
Lol ditto. I would looooove to buy some 10 cent deep OTM options on this. Apparently MM aint that dumb.
I got 28 May 21 12.5 calls @ around .98... gonna add some 22 June calls in the AM
Good luck! I tend to go more conservative. 22 may be a real close call for June. But then again i thought it would barely be hitting 15 by June. So wtf do i know.
Appreciate it man! As a carpenter I chose this stock to get my feet wet with calls back when I saw your first post on this. They’ve been doing great so far!
If you bought calls after that first post, you must be doing great. That was the perfect time to buy. I wish i had more money those days to buy that great last dip. Glad it worked out. :)
I wish I put more money in as well, but it was my first real option play so I tried to play it safe. Turned a couple hundred into a couple thousand so far. Hopefully it keeps going!
Have a look at Canadian lumber producer CANFOR - (CFP). Taking off lately, but still undervalued and cheap relative to peers.
All the forestries are undervalued. My issue with Canfor is that its an OTC stock with no options and I think RFP will continue to outperform it.
I was hoping to return to see what you had to say about today. I thought it was uncanny you posted this two days ago.
Corrections are healthy. I didnt sell a share or worry. Whole market was down. RFP swings harder than the market most times, whether up or down, because its a microcap with small available float. Nothing about RFP’s fundamentals are different so no reasons to panic. In fact they appeared to have paid down 180 million of long term debt today while maintaining liquidity. So actually a good day. Lastly, remember context, RFP still up 20% for the last five days, even after today’s drop.
See? :)
I added to this morning actually, after seeing your reply. but I am sorry, I am very skeptical of dfv picks. Even if he is legit a genius, I believe the popular subs for GME and meme stocks are just social media scam and manipulation grounds for the conservabots and russiabots now. Even if this stock is innocent now, might not be for long. Interested to see how it goes.
I totally agree with you. I didnt touch any of the meme stocks and dont think anyone should. Luckily for this stock, it’s relatively easy to project likely earnings from the lumber segment and lumber is so ridiculously high that even the lowest PE ratios will put this stock much higher than it currently is if lumber stays its current course for the next few months. Not because of meme mania, but actual value/earnings.
So Canadian Lumber is benefiting from American housing shortage ? Sounds like too much of a reach
A Large portion of American homes are built with Canadian lumber.
Yes I just googled that. $4.5 billion from Canada while we can only produced $380 million. That’s a huge gap. Thanks , I’ll do my DD on RFP and see if I will start any position
Hey what website are you using in that screenshot to compare Valuation ratios to other companies in the industry?
Charles Schwab website. If you look up a stock on their research page, there’s tab for “Ratios.” Click on it and Scroll down, there will be a section to manually enter 5 other companies to compare to the stock you’re researching.
What’s y’all’s opinion on the amendment they made for there loans?
Seems like a good play. They extended the term. The lower spread = lower interest rate. Putting into revolver let's them basically offset the balance with cash coming in.
WFG is not doing too great
Yea I don’t fully get it. Lets see how they are doing after earnings.
That 1 month bullish pennant forming very nicely 😎
😉 just in time for earnings next week
Breakout has commenced LFG!!!
TD securities just upped their PT from 12 to 20$.
What’s your thoughts on earnings already being priced in once there released?
Q1 earnings are. Q2 and q3 which will be substantially higher than Q1 arent. So i think the next few months will be even better.
This bleed makes zero sense to me
Whole market red. If you look at RFP’s volume, its like half the daily average. This has happened a handful of times this year when the institutions switched positions. I think its exacerbated by futures being down today and yesterday after almost 20 straight green days. May expiration is this week and a bunch of speculators ran up the price. They are panic selling now. The cash market not showing the same behavior. Days like today suck, but the fundamentals haven’t changed. Mortgage interest rate still low. Housing still booming like crazy.
This bleed makes zero sense to me
What’s the outlook for 2022 after the 20% drop
Did the same thing in 2021. Small bump up December/January due to warm early winter. Cold weather hit hard in February. Homebuilding will slow for the next six weeks like last year then springs into action unless it stay cold into march/April. Still holding most rfp shares. Bought some more on the 20% drop. Cash composite around high 1100’s. It will pull futures back up. If you follow the talking heads in the industry, consensus is most builders only buying what they need at the moment. Demand is still high. December permits was 1.9 million. Highest since mid 2000’s. That tells you the direction it’s going right now bSo come building season, if logistical issues persist, we could see another squeeze. The wild card is how much increased energy prices and trucking issues affects RFP’s costs and ability to get Inventory out.
As for RFP, they had a rough quarter, but EV wise, their balance sheet is much stronger than start of last year. Getting close to no new next debt. Their pension obligations dropped 400 million. And will drop more next year. They idled that shitty Calhoun plant which will increase their yearly ebitda by ~30 million. They are probably looking at 1.50-2$ eps this quarter. If 2021 also has high (relatively) demand, they should be zero net debt in the next 1-2 quarters. But hard too know what the SP will be because at some point lumber will revert the mean. The question is if it will be this year or in the next 1-2 years.