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August 12, 2010 Dear Friend,
The sharp slowdown in housing activity,
volume declines and drop to $165 from $395 early May "trade journal" OSB
prices has greatly increased LPX's losses, even as we estimate a $21 per 000
sq ft drop in fiber and other costs in 3Q as supplier Plum Creek has a
markedly gloomy log outlook. We cut earnings estimates and our price target
for LPX, while staying at Neutral.
We cut our discount rate estimate for
Anglo American to 7.5% from 8% partly in line with Teck's 6.00% thirty year
bond offering last week, while partly offsetting it with a 2.1% down from
2.3% terminal growth rate estimate. We cut earnings estimates with adverse
currency and cost moves, but maintained a $28 price target on the ADS and
Overweight ratings.
Faithfully,
John C. Tumazos, CFA
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Copyright © 2008 John Tumazos Very Independent Research,
LLC
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