The wood industry, while cycle, we think should be OK right now. Once rates peak, there could be a favourable tailwind in demand for lumber (housing shortages). The industry performance depends largely on lumber prices, which experienced significant cyclicality in recent years. But most names in the industry are trading quite cheap compared to historical averages as they are currently in a cyclical downturn, we think getting exposure to the sector at this time could make sense. For income (but it is a small cap) we like ADN; for some capital appreciation potential we continue to favour WFG. CFP is getting interesting, as it continues to decline but its balance sheet is far stronger than in prior cycles right now. SJ is doing well but logs and lumber is only a small part of its business. Timing is never perfect, but we do think it is a sector to be owned BEFORE there is a rate pivot.
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