Insights & News

September 2012
Investment Outlook

8 Ways to Play a Housing Recovery



Curt Gross, FAI’s Director of Research, was quoted in a Fidelity news article on housing stocks. Here is an excerpt from 8 Ways to Play a Housing Recovery: Timber stocks tend to rally in a housing recovery as builders snap up wood products from pine for frames to birch flooring. Several timber stocks are following the trend, including big names like Weyerhaeuser (WY), which also builds homes.

But the largest timber landowner in the U.S., Plum Creek Timber (PCL), has lagged the group and still looks like a good bet, according Curtis Gross, a financial adviser with Financial Advantage in Columbia, Md. “About two thirds of Plum Creek’s business is tied to housing and the stock has historically moved in line with the builders. Since late 2011, however, the stock has trailed the sector for “no real good reason,” says Gross. The stock is fairly defensive since Plum Creek has a natural resource base that’s continually being replenished — regardless of home sales — and it’s one of the lowest-cost U.S. timber producers, giving it a competitive advantage. Plus, the stock yields 3.7%, providing a bit of income and downside protection.

To read the full article click here.


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