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Risk management is back in vogue. S&P’s downgrading of US sovereign debt last Friday to AA+ from AAA sparked sell-offs across world markets. Yesterday (Monday August 8, 2011) scored Wall Street its worst day in over two-and-a-half years. Meanwhile, how more…
It’s December 31, 2010 and you’re sitting on a pile of cash. Do you invest in the S&P 500, an all-REIT index, private timberlands or publicly-traded timber REITs? Based on the performance of key indices, putting your chips in with more…
Last week, we posted how Plum Creek (PCL) and Potlatch (PCH) offset weak log markets in 2Q 2011 with land sales. The balance of the public timber REITs, Rayonier (RYN) and Weyerhaeuser (WY), have also reported their results and, as more…
Second quarter 2011 results reported by Plum Creek (PCL) and Potlatch (PCH) the past two days indicated continued weakness in those segments affected by housing markets (timber harvesting and wood products manufacturing). Both firms somewhat offset lower timber harvesting cash more…
Who buys the trees grown by timberland-owning REITs? Timber REIT returns depend on strong demand from end-use markets for forest products such as lumber, plywood, pulp and OSB. This explains the dependence that timber REITs have on housing markets. Low more…
How can timber REITs leverage their available capital, given the fact that they must distribute, and cannot retain, earnings? Over time, timberland-owning REITs have identified and employed multiple investment strategies to leverage available capital. These strategies include: “Recycling capital” through programs more…
According to Forisk tracking of timberland ownership, 58 firms currently own or manage in excess of 100,000 acres of timberlands in the United States. These firms feature the following descriptive statistics: As a group, they own/manage 57.6 million acres of more…
In an earlier post (February 15, 2011), we wrote about the pace-setting performance of timberland-owning REITs, as measured by the Forisk Timber REIT (FTR) Index, vis-à-vis other asset classes. In revisiting this theme after close to two quarters of stomach-churning more…
“How do timberland investment managers make money?” The question itself, asked by an analyst working for an institutional investor, was straightforward enough. However, it was the third time in the past week our team had received a call with such more…
Two-thirds of the nearly 6.2 million acres that Weyerhaeuser (WY) owns and leases in the United States are located in the South. Our Equity Research team matched WY’s timberland acres to Forisk’s state-by-state forecast of stumpage prices and wood demand more…