|Bid||0.00 x 1000|
|Ask||0.00 x 3100|
|Day's Range||29.10 - 29.93|
|52 Week Range||13.10 - 31.58|
|Beta (5Y Monthly)||1.96|
|PE Ratio (TTM)||70.83|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Mar 05, 2020|
|1y Target Est||N/A|
(Bloomberg) -- Americans are coughing up $4,600 more on average to buy their dream home than six months ago -- thanks to a record run-up in prices for a once-cheap plywood substitute.Prices are on a tear for those bonded wood-chip sheets commonly used as sheathing for walls, floors and roofs in new home construction. Oriented Strand Board, or OSB, has long been used as a low-cost alternative to plywood, but the product now fetches a higher price as increased demand and tight supplies lead to delivery delays and elevated construction costs in the U.S. and Canada.“It’s difficult to get, the lead times are out,” said Lorne Winship, general manager at Pacific Homes, a west coast builder specializing in custom prefabricated homes, adding that the premium over plywood is “absolutely crazy.”While the rally is hurting builders and buyers of new houses who already suffered from surging lumber prices earlier this year, it’s bringing windfalls to manufacturers such as Norbord Inc. and Weyerhaeuser Co.OSB soared to a record $729 per thousand square feet (93 square meters) in September and held that level through mid October while southern pine plywood prices plunged in the past month, according to lumber pricing company Random Lengths.The engineered-wood product is at a premium to southern yellow pine plywood for the first time since 2006, according to RBC Capital Markets analyst Paul Quinn.“We expect that this is at least partially due to higher housing starts given that buyers were less willing to substitute,” Quinn said in an Oct. 12 report, adding that OSB is used more heavily than plywood in new residential construction.Manufacturing OSB requires a different process and equipment than making plywood, meaning lumber companies can’t switch over production to address changing markets.Tight supplies have caused delivery delays for smaller builders like Pacific Homes, owned by Winnipeg-based All-Fab Building Components Inc. Winship said he’s being told OSB deliveries to his Vancouver Island company will take two to three months now instead of the typical two weeks. His woes are somewhat eased by falling costs of other lumber materials.Lumber futures have tumbled from August’s record highs, though they’re still up 24% this year. That’s contributed to a volatile year for North America’s lumber industry, with Covid-19 and wildfires causing disruptions amid escalating demand. Do-It-Yourselfers, fortified by government stimulus checks, took on home renovations during pandemic lockdowns as homebuilders broke ground on an increasing number of new projects.Elevated wood costs lifted the selling price of an average, new single-family home in the U.S. by $15,841 since mid-April, according to David Logan, director of tax and trade policy analysis for the National Association of Home Builders. Almost a third of that increase -- $4,600 -- came from higher OSB prices.“Buyers have become more defensive in recent weeks,” Logan said in an interview. “They’re ordering for very short-term needs, thinking with the fall in plywood prices that OSB prices are likely to follow.”In Canada, prices of new homes surged in September for the largest monthly jump in 14 years, according to Statistics Canada, with builders citing higher construction costs for the gain. Increased costs for building materials are expected to further fuel rising prices in the short term.Rally BenefitsThe surge in OSB demand is expected to benefit the few companies that make the material, with Norbord, Louisiana-Pacific Corp., Koch Industries Inc.’s Georgia-Pacific, and Weyerhaeuser accounting for nearly 75% of North American production. Norbord is 43% owned by Brookfield Asset Management Inc., one of the world’s largest investors in real estate.Those producers may benefit from the rally in their upcoming earnings, according to Scotia Capital forest-products analyst Benoit Laprade. Norbord, whose 29% market share makes the Toronto-based firm North America’s biggest producer, is expected to report its “best ever” third-quarter results, while Louisiana-Pacific and Weyerhaeuser are also expected to see strong revenue from OSB sales, he said in an interview.“These record profits will provide those companies with enhanced financial flexibility and the opportunity to return capital to shareholders through reinstatements or increased dividends or share repurchases,” Laprade said.As the northern hemisphere heads into winter and lumber prices decline, analysts expect OSB prices to follow. Laprade expects some OSB to sell around $410 in the fourth quarter.“We do see some seasonal slowing in demand but overall if you look at the broad supply-demand dynamics, it’s favorable for all producers,” Kevin Mason, managing director at ERA Forest Products Research, said in an interview. “At the end of the day, the consumer’s going to have to bear the brunt of this.”(Adds Norbord shareholder in 14th paragraph. An earlier version corrected company spelling.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Shares of Weyerhaeuser (NYSE: WY) saw some unusual options activity on Thursday. Following the unusual option alert, the stock price moved down to $29.59. * Sentiment: NEUTRAL * Option Type: SWEEP * Trade Type: PUT * Expiration Date: 2020-11-20 * Strike Price: $25.50 * Volume: 2800 * Open Interest: 7Three Signs Of Unusual Options Activity One way options market activity can be considered unusual is when volume is exceptionally higher than its historical average. The volume of options activity refers to the number of contracts traded over a given time period. The number of contracts that have been traded, but not yet closed by either counterparty, is called open interest. A contract cannot be considered closed until there exists both a buyer and seller for it.The trading of a contract with an expiration date in the distant future is another sign of unusual activity. Generally, additional time until a contract expires increases the potential for it to reach its strike price and grow its time value. Time value is important in this context because it represents the difference between the strike price and the value of the underlying asset.Contracts that are "out of the money" are also indicative of unusual options activity. "Out of the money" contracts occur when the underlying price is under the strike price on a call option, or above the strike price on a put option. These trades are made with the expectation that the value of the underlying asset is going to change dramatically in the future, and buyers and sellers will benefit from a greater profit margin.Bullish And Bearish Sentiments Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price.Although the activity is suggestive of these strategies, these observations are made without knowing the investor's true intentions when purchasing these options contracts. An observer cannot be sure if the bettor is playing the contract outright or if they're hedging a large underlying position in a common stock. For the latter case, the exposure a large investor has on their short position in common stock may be more meaningful than bullish options activity.Trading Options With These Strategies Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.For more information to understand options alerts, visit https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alertsSee more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Analyzing Weyerhaeuser's Unusual Options Activity(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The $11.5 billion T. Rowe Price Mid-Cap Value fund looks for quality investment opportunities at a good price. The fund reopened to new investors this past spring.