Is There An Opportunity With Stella-Jones Inc.'s (TSE:SJ) 33% Undervaluation?
In this article we are going to estimate the intrinsic value of Stella-Jones Inc. ( TSE:SJ ) by projecting its future...
Has the Canadian Paper and Forestry Products Industry valuation changed over the past few years?
|Sun, 05 Dec 2021||CA$20.9b||CA$29.7b||CA$6.9b||6.1x|
|Tue, 02 Nov 2021||CA$20.4b||CA$29.3b||CA$6.8b||6.1x|
|Thu, 30 Sep 2021||CA$22.2b||CA$28.2b||CA$6.7b||5.9x|
|Sat, 28 Aug 2021||CA$21.2b||CA$27.9b||CA$6.6b||6.1x|
|Sun, 04 Jul 2021||CA$21.4b||CA$27.9b||CA$6.6b||5.8x|
|Wed, 07 Apr 2021||CA$21.5b||CA$21.8b||CA$3.6b||8.6x|
|Sat, 09 Jan 2021||CA$14.7b||CA$18.5b||CA$1.8b||11.5x|
|Fri, 02 Oct 2020||CA$11.3b||CA$16.8b||CA$781.4m||11.5x|
|Mon, 06 Jul 2020||CA$8.9b||CA$15.4b||-CA$178,867,251.59||16.8x|
|Thu, 09 Apr 2020||CA$6.1b||CA$15.9b||-CA$418,779,261.81||11.8x|
|Wed, 01 Jan 2020||CA$10.4b||CA$16.0b||-CA$436,803,198.00||15.7x|
|Sat, 05 Oct 2019||CA$10.7b||CA$16.3b||-CA$321,934,969.00||16.7x|
|Tue, 09 Jul 2019||CA$11.4b||CA$17.4b||CA$373.5m||18.4x|
|Mon, 01 Apr 2019||CA$12.5b||CA$18.4b||CA$1.2b||12.6x|
|Thu, 03 Jan 2019||CA$12.8b||CA$18.8b||CA$1.7b||9.2x|
Current Industry PE: Investors are more pessimistic on the industry, considering it's trading at a PE ratio of 6.0x which is lower than its 3-year average PE of 12.5x. Given that earnings are expected to decline by 49%, the lower than average PE seems justified.
Past Earnings Growth: The earnings for companies in the Forestry industry have grown 60% per year over the last three years, and revenues for these companies have grown 17% per year. This means that more sales are being generated by these companies overall, and subsequently their profits are increasing too.
Which industries have driven the changes within the Canadian Paper and Forestry Products industry?
Industry PE: Investors are most optimistic about the Paper Products industry even though it's trading below its 3-year average PE ratio of 18.4x. However analysts are expecting annual earnings growth of 11%, which is lower than the prior year's growth of 95% per year. So the market might believe that analysts are underestimating future growth. Meanwhile, investors are most pessimistic about the Forestry Products industry, which is trading below its 3-year average of 13.8x.
Forecasted Growth: Analysts are most optimistic on the Paper Products industry, expecting annual earnings growth of 11% over the next 5 years. However this is lower than its past earnings growth rate of 95% per year. Meanwhile, the Forestry Products industry is expected to see its earnings decline by 51% per year over the next few years.
Which companies have driven the market over the last 7 days?
West Fraser Timber
Western Forest Products
Atlas Engineered Products
Canfor Pulp Products
GreenFirst Forest Products