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Stocks to Buy on Lumber Crash

·2 min read

Hey everybody, Dave Bartosiak with Trending Stocks at Zacks.com. Timberrrrrr! That’s the sound of lumber prices finally coming back down to Earth. During the pandemic, the perfect storm hit the lumber market. Lumber mills had to shutter their doors or curb production, just like everything else during the early stages of the pandemic. Then, since everybody and their Momma’s was stuck at home, unable to go anywhere, all that excess cash on hand got spent on putting in rec rooms and building garages. This created a huge demand-side spike for lumber.

This happened before, during the easy-credit days of the housing boom leading up to the Great Recession. The lumber mills knee-jerk reaction was to increase Capex and expand production. When the bubble popped, lumber mills were left holding the bag.

In a rare moment of clarity, the lumber mills decided that this time around, that wasn’t going to fly. Rather than fall for the same trick, lumber mills held their ground like a bunch of OPEC members. They kept production at norms and let the lumber market do what it does, fluctuate dramatically. This may have upset a bunch of folks trying to buy plywood, but it kept the lumber mills from bleeding out when the bubble eventually popped.

That bubble has now popped my friend, as lumber futures have been sliced in half since early March. With lumber producers now on the defensive, what’s the next industry in line to benefit from the lower lumber prices? Let’s check out a few stocks on Zacks.com to see where the opportunity might be.

In this video, we check out Weyerhauser WY, LL LL, Home Depot HD, Beacon Roofing BECN and others.

Every time you share this video, somebody finally figures out how much wood a wood chuck could check if a wood chuck could chuck wood. Follow the author, Subscribe to the YouTube Channel, Twitter @bartosiastics and check out Zacks.com/promo for this week’s special report on how to profit from the Metaverse. For everybody here at Zacks, I’m Dave Bartosiak and I’ll see you next time.


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Weyerhaeuser Company (WY) : Free Stock Analysis Report
 
The Home Depot, Inc. (HD) : Free Stock Analysis Report
 
Beacon Roofing Supply, Inc. (BECN) : Free Stock Analysis Report
 
LL Flooring Holdings, Inc. (LL) : Free Stock Analysis Report
 
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Zacks Investment Research