former shareholder here. (sold to raise funds for a house, not because of any ryn issue--had doubled my money)
lookign for a good entry point in RYN.
am pleased the stock is down the last 5 or 6 days but can anyone explain why? I would think timber would be a good inflation hedge.
Where do you recommend as a good entry point in this stock?
How do you think RYN will fare as the housing slowdown continues - lumber prices are low and I would expect will head back up soon.
Thanks for serious replies.
I don't pretend to know where the share price is headed next and will only express my view as to what the company is worth. At these prices the company is significantly undervalued. The performance fiber business has long term supply contracts in place. The HBU lands aren't going to spoil or become obsolete and any timber not harvested becomes 5% to 7% larger in a year.
The 5% dividend provides buoyancy to the share price as does the hard assets, namely the land and the trees. At these levels I don't think you can go wrong. I can't tell you the price won't go lower because markets are volatile and often irrational. Share prices can remain disconnected from the underlying value of a business for extended periods of time, but not forever. Personally I am content to sit on my hands and collect my 5%.
What has worked for me over the years is to gradually increase my dividend payers and REITS so that I always have fresh money coming in. Then when the market tanks I can either start up the drip (free in most IRAs) or just buy what is cheap. And certainly there is a lot of cheap right now. Luckily, the world will probably no longer get the flu when the US gets a cold. Basically, the rest of the world is wondering why they loaned us money to build a bunch of houses to be sold to people who can't afford them. That is a mistake that will not made again for a generation, so as a country our cost of capital will go up, etc. So much fear and so on now, but if you look at the companies with international business, like IBM, INTC and GE, they are doing quite well. I think RYN fits into the category, other than the Florida real estate and even that will work out in the long run. A buy here, but it may get a lot cheaper before it gets more expensive. As always, you have to make yourself buy when you want to panic and sell, and make yourself sell when you are gloating and greedy.
Found myself in similar predicament ... had automatic stop-loss at 43 in effect to protect my RYN profit (not a double as you so happily achieved - congrats ... but still a pretty nice chunk of change). Came back from vacation and surprised to see the trade was executed when RYN dropped aa few days ago ... then surprised to see it rise back up again so quickly above 43 ... seems like a lower resistance level, and I definitely want to get back in. All of the previous analysis seems spot-on to me, and there's that nice little dividend besides ..
I think anything below 40 is a great buy. I bought some more today, and will try to hold off buying some more. But I don't know if I will be able to contain myself. I can go on and on about the company. I lived in Fernandina Beach for 25 years and worked at the mill there for a total of a year on and off during the summer and Christmas break from college. And I worked in the forestry division for a month or so. The only problem RYN has now is the abrupt halt to the housing market in Florida, although their commercial property should do okay. The company has a lot of prime real estate, a lot of commercial highway frontage, in the area, which is valuable. And Florida real estate will come back, it always does. There are very few mills that make the type of chemical cellulose the RYN does and that business is expanding-60% is exported. Timber is always a great asset, particularly professionally managed timber. The reason for the selloff, IMHO, the problems JOE is having-firing people, eliminating dividend, etc.-and since RYN also has a lot of land in Florida, the unsophiscated panic out of RYN. A dumb move, IMHO, there really no comparison between the two-one, JOE, owns some nice waterfront property...and a lot of interior scrubland that is not worth a whole lot, that's it. RYN has timber holdings throughout the US and New Zealand, as well as the paper mills that make a unique product, AND some valuable commercial real estate, along with aforesaid scrubland like JOE, but I think the RYN's "bad' land is worth more because of location, location, location. A BUY here for me, but if you can get it under 40, fire at will.