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08-07-2024, 05:18 PM
As a fundamental investor, you are looking for companies trading at a discount to their value based on the business fundamentals. The starting point in assessing the business fundamentals is looking at the historical performances.
When you apply this approach to NYSE Boise Cascade Company (BCC), you may not get a realistic picture. This is because its performance over the past few years were skewed by extra-ordinary high wood prices.
My view is that these high prices were due to COVID-19, the supply shortage, high inflation and even the Ukriane invasion. As such I do not think that they are sustainable
So if you use the past year performance to project the future, you will have a very optimistic picture. I think a more realistic picture is to look at “normalized” product prices. On such a basis, I do not think that there is currently an investment opportunity in BCC.
Of course, the market thinks differently and I suspect this is the reason for the current relatively high share price. Refer to page 19 of INVEST https://notice.shareinvestor.com/email/n...-05Jul.pdf
When you apply this approach to NYSE Boise Cascade Company (BCC), you may not get a realistic picture. This is because its performance over the past few years were skewed by extra-ordinary high wood prices.
My view is that these high prices were due to COVID-19, the supply shortage, high inflation and even the Ukriane invasion. As such I do not think that they are sustainable
So if you use the past year performance to project the future, you will have a very optimistic picture. I think a more realistic picture is to look at “normalized” product prices. On such a basis, I do not think that there is currently an investment opportunity in BCC.
Of course, the market thinks differently and I suspect this is the reason for the current relatively high share price. Refer to page 19 of INVEST https://notice.shareinvestor.com/email/n...-05Jul.pdf