By: Larry MacDonald

Canfor Corp. is outperforming the market and has insider buying, noted INK Research recently. Over the past 12 months, the Canadian forestry company is down only a quarter as much as the market and insider buying is being “driven by director Jimmy Pattison, who has bought $29.8 million dollars worth of stock in the company.” Mr. Pattison is one of Canada’s wealthiest businessmen and has a reputation for being among the country’s most astute.

The tumble in the Canadian dollar this year is a big positive for lumber export sales. Canfor’s stock was in rally over the summer likely for this reason but when the extent the economic downturn began to become more apparent in September, it was dragged back down. However, in recent weeks, it has been edging up again while the broader market sells off.

Canfor is seen as one of the Canadian lumber companies best able to hang in through the tough times and be around for when conditions rebound. The conditions for a rebound could be finally falling into place with the ongoing cutbacks in industry production, drop in the Canadian dollar, and highly stimulative U.S. monetary/fiscal polices that should eventually trigger a revival in purchases of new houses.

I had hoped back in May of 2007 that Canfor shares would have been higher by now if only on the basis of a dominant firm picking up market share in a hard-hit industry. Maybe a bit more patience will be rewarded.