# Acadian Timber (ADN)



## Loon (Apr 12, 2012)

Has anyone looked into this? One of the Dividend Income funds I'm using as a screener is holding it. Yield looks good.


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## Doug2000 (Apr 6, 2011)

*I'm interested in comments also.*



Loon said:


> Has anyone looked into this? One of the Dividend Income funds I'm using as a screener is holding it. Yield looks good.


Interested Also


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## PMREdmonton (Apr 6, 2009)

I just had a quick look at the summary of the company's financials.

The dividend they pay is a bit inconsistent and seems to go up and down with their earnings so you shouldn't invest here if you want a consistent dividend income stream which is increasing in time.

Their BV/Share has dropped considerably form 4 years ago which is always a cause for concern. There was a dilution a few years ago which is also always a cause for concern.

All of the 4 analysts who hold this only rate it as a hold which is analyst speak for maybe you should consider selling this and definitely don't buy it right now. It also seems as though there is no consistent history of the company beating estimates or of recent esimate upward revisions.

Their basic metrics like P/E ttm (13.3), EBITDA/market cap TTM (around 10), and P/B (1.03) all look good. However, ROE and ROIC are pretty mediocre. It should also be noted that EBITDA was down in 2011 compared to 2010 as was FCF. The dividend payout ratio was 111% of FCF last year so it may not be sustainable as it was partially paid out of debt.

Their recent presentation on their website argues that the current challenging market for timber will continue for this year. They aren't expecting much improvement in softwood lumber and note there is stress in softwood pulp which is 40% of their business.

Their business seems very simple - they own a bunch of timberland in NB and Maine - 1.3M acres which they harvest for timber (plus 1.1M of crown land which they manage) so I don't see any technological concerns being of any concern. I only wonder if housing is slow to improve if that will impact them - OTOH, it probably has been a headwind for them for awhile now and should eventually normalize.

Overall, I think I'll pass on this one because of the lack of consistent increase in BV per share, inconsistent dividend history, excessive payout ratio from last year, declining EBITDA and FCF and recent dilution of stock. The stock isn't cheap enough on a ROE or EV/EBITDA for me to want to venture in here without more assurance of a rock solid dividend history. This one has potential but I'd want it to be cheaper for a larger margin of safety before I invest. I'd be more interested if share price dropped to about 9.00 and they had adequate earnings to cover that dividend.


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## Spidey (May 11, 2009)

This one was recently recommended on Market Call and I've put it on my watchlist. I'm a little reluctant as timber tends to be a fairly volatile commodity and very dependent on economic factors. Speaking of volatility, I wonder what damage a massive forest fire would have on a holding such of this.


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## Loon (Apr 12, 2012)

Thanks guys, very informative. I'm just starting out and looking for stability and longer history. I was curious why the RBC CDN Dividend Fund was holding about $8M of it.


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## TomB16 (Jun 8, 2014)

Any thought on what the 20% tax announced today will affect ADN?


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## Eder (Feb 16, 2011)

Well it figures...most lumber stocks are rallying on announcement of 20% tariffs.


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## MrsPartridge (May 15, 2016)

Sorry for dumb question. Why are lumber stocks rallying now that Trump is removing protection of soft lumber?


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## TomB16 (Jun 8, 2014)

ADN is a little off right now (1.64%) but nowhere near as bad as I expected. I thought it would be halved by the end of the day.

I worry this is just the sort of thing that could be deliberate market manipulation. I hate to trade on news because there is always that chance.

Mostly, I try to own good companies and look for opportunities to buy them on sale but it appears this is not such an occasion.


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## Beaver101 (Nov 14, 2011)

MrsPartridge said:


> Sorry for dumb question. Why are lumber stocks rallying now that Trump is removing protection of soft lumber?


 ... good question ... I own little WEF and it's going up (moreso) instead. I guess the Trump's tariffs ain't no big deal when there are other buyers (global) for our quality products.


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## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> Eder said:
> 
> 
> > Well it figures...most lumber stocks are rallying on announcement of 20% tariffs.
> ...


It is not so much "no big deal" as it is the relief of more much lower than the forecasts of the tariff plus the anti-dumping coming in at 45 to 55%.

In 2002, the total was 27.22% with the tariff at 18.79% and the anti-dumping levy at 8.43%. With the first part coming in lower than 2002, it suggests that the Trump administration will be in line with previous US gov'ts.


Still not great for Canadian exports but not, at this time, looking like the draconian increases that were feared. 



Cheers


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## Eder (Feb 16, 2011)

Beaver101 said:


> ... good question ... I own little WEF and it's going up (moreso) instead. I guess the Trump's tariffs ain't no big deal when there are other buyers (global) for our quality products.


WEF only has 24% of revenues from the USA...big+ I think.


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## londoncalling (Sep 17, 2011)

WEF's diversification both internationally and offer of products(not just softwood building products) was the main reason I chose it over the others such as Westfraser, Canfor, Interfor and Acadian. Used to hold Norbord but exited awhile back.

Cheers


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