Interest rate cuts are in the news. They should increase lumber demand. WY should benefit. Also Olin, home builders, Whirlpool, carpet, furniture, paint, hardware, chemicals. A good move for economic growth.
Here is the latest weekly chart. While REIT’s in general didn’t experience sell off during obliteration day and has since recovered, $WY had not recovered and established new trading range. I closed all the puts I sold for Oct $22. This is a very tight range and watching whether this range breaks down.
Lumber prices are still going down…
The mills have excess inventory, so there is a good chance the lumber price will continue to go down. $WY, is selling land, on their real estate division, sold their mill in Princeton, British Columbia, canada and the British Columbia timber licenses…
One of the new revenue areas for $WY is ENR, energy, and natural resources. Specifically the company is targeting $100 M EBITDA from wind, solar, carbon capture and mineral rights. With the current administration wind, solar and carbon capture are heavily impacted. However, the CEO is showing confidence that renewables are inevitable because the electricity demand from AI data centers are going to push the electricity prices very high.
We need to see where the bottom for this stock is, for now, I have sold Jan $22 puts, but if the stock breaks below $20, I will not be too upset. Long-term housing, will generate significant demand for lumber.
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$WY released updated Sep investor presentation that updated 3Q guidance. $WY is having challenges with lumber price, so they are selling more real estate to meet FCF estimates. At some point, they have to accept the lumber price cycle and stop selling land to cover the shortfall in cash flow. I would rather $WY cut dividend and husband cash… but managements have their own pressure.
Now, they are starting to highlight the long-term value of their timberlands. Pretty soon, we may even get some estimates or value/ acre… 
While I have some Jan $22 Put sold, there is a higher risk the price goes below. There is a possibility of US recession, given existing housing challenges, people will not be able to buy houses if they don’t have jobs, even if interest rates are low, there are some extreme scenarios, the stock can get below $20, to $18, $15…
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The stock broke down that $24 level 
The stock is going to decline further, and it is going to get bad, before it gets better. How far it is going to go down, we need to see.
The conference call commentary are sobering. I am aware housing is bad and in the call, the CEO mentioned even repair and remodel is bad, (this is a risk for HD & LOW). At some point, the supply has to go down to stabilize the price, and it is going to be industry wide and $WY will also have to reduce harvesting, and reduce wood division operations. Currently they are losing money in their Lumber operations on Wood Product.
The company cannot keep selling the real estate to maintain the cash flow. For now, RE, and climate solutions are providing stable cash flow. But, at some point, the dividend is going to be in discussion. The december investor day is going to be critical to see what are $WY’s long-term roadmap to 2030. For now, I may have to close my puts at a loss, step aside and wait for the investor day.
My old favorite $CTT, which was purchased by $PCH, is now merging with $RYN in an all stock deal. Companies are merging to gain scale, and to cutdown the expense.
I have made money on $WY, $CTT, $RYN, all because I bought them at the bottom of the cycle and exited as the cycle turned around. The challenge is figuring out where is the bottom.
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This is a great perspective. Thanks for showing the play by play here.
Low bid standing orders at a price you can stand seem to be in order here.
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