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This is the sixth in a series related to Forisk’s 2013 forecast of softwood stumpage prices in the United States. When housing crashed in the United States, forest owners and timberland investors deferred harvesting sawtimber, the logs needed to manufacture more…
Money does grow on trees. Unfortunately, it grows in small denominations. So we care deeply about managing costs and minimizing taxes. Which brings us to a category of questions I get each tax season: timber depletion. What is it? Depletion, more…
This post summarizes research from the January 2013 edition of Wood Bioenergy US (WBUS). Viable wood bioenergy projects can secure competitive financing. In U.S. capital markets, primary sources of financing for these projects include private equity, project finance, grants, loans and more…
Want a simple method for valuing stocks and income earning real estate or timberland? Consider the Dividend Discount Model by dividing next year’s income, assuming it will be earned annually in perpetuity, by a constant discount rate or cost of more…
When talking about timberland investing while having a beer or standing over the hood of a truck, not when signing checks or allocating capital….. A reasonable estimate of a forest’s current economic value equals the standing merchantable volume multiplied by the more…
News flash: we all make errors when analyzing forestry investments. Which are the most common and how can we avoid them? At the end of the day, most analytic errors in forestry relate to the data used – the inputs more…
Attention shoppers! An NPV of zero does not necessarily indicate “bad investment.” Previously, we discussed applications and limitations of using cash-on-cash (COCR) return as a metric for analyzing forestry and timber investments, as well as questions related to internal rate more…
While cash-on-cash (COCR) return – a percentage often used by investors to evaluate income-producing real estate – has limitations when applied to timberland investment performance, it consistently generates interest from institutional investors. Below are questions analysts asked us about COCR: more…
As noted in Part I of this series, cash-on-cash return (COCR) provides one way for real estate investors to quickly compare the profitability of different income-producing properties or investments. However, it has limits for measuring returns or wealth creation over more…
Timberland investors naturally care about the cash flows and distributions from timberland investments over time. These cash flows vary with the products grown, markets served and age distribution of the forest owned. Also, timberland portfolios can be constructed to meet more…