Archive: Weyerhaeuser (WY)

April 4th, 2008

Who’s Hiring? More Stock Tips from the US Government

My latest column is up at RealMoney.

I dissect the jobs report to see which industries are showing the best/worst growth in new hiring, on the thesis that companies in these industries may present investment opportunities.

The fastest growing industries are restaurants, hospitals, mine services, machinery, and oil & gas extraction. The worst were transportation equipment and a plethora of housing-related sectors.

Disclosure: At time of publication, William Trent owns shares of Starbucks (SBUX).

Disclosure: Author is long Starbucks (SBUX) at time of publication.

Topics: Terex (TEX), Joy Global (JOYG), Astec Industries (ASTE), Minefinders (MFN), Lifepoint (LPNT), Bucyrus International (BUCY), Manitowoc (MTW), Allis Chalmers (ALY), GATX (GMT), Furniture Brands (FBN), Leggett & Platt (LEG), Superior Well Services (SWSI), Exterran (EXH), Dawson Geophysics (DWSN), Universal Health (UHS), Community Health (CYH), Oil Well Services and Equipment, Retail (Specialty), Forest and Wood Products, Weyerhaeuser (WY), Home Depot (HD), Helix Energy Solutions (HLX), Retail (Home Improvement), Lowe's (LOW), Red Robin Gourmet Burgers (RRGB), Texas Roadhouse (TXRH), Panera Bread (PNRA), Chipotle Mexican Grill (CMG), IHOP (IHP), Starbucks (SBUX) | 2 Comments

June 14th, 2007

PPI: Who Has the Pricing Power?

Producer prices up 0.9 pct in May - Yahoo! News

Overall producer prices, which are a measure of prices before they reach the consumer, rose 4.1 percent from a year ago, the biggest year-over-year increase since June 2006. However, core producer prices were up just 1.6 percent from a year ago, and that moderate gain will likely add some relief to Federal Reserve policy-makers as they balance the risks of inflation against economic growth.

As is often the case, I am more interested in whether the data will give me specific investment ideas. Therefore, I like to look into the industry PPI data for a sense of which industries may be gaining or losing pricing power relative to market perceptions.

For example, the housing slowdown means sawmills are gathering dust. Pricing power is plummeting.

Yet the stock price for industry leader Weyerhaeuser (WY) is fairly strong.

Yes, I know that institutional investors are clamoring for timberlands. So perhaps private equity would make a play for WY. But then again, perhaps they wouldn’t - and with all the buying that’s been going on lately I wonder who is left to buy.

Think gasoline prices are high? Actually, refinery pricing has been far lower than normal the last year. The bad news (for drivers) is that it seems to be rebounding.

A chart of Valero (VLO) suggests the PPI may have some explanatory power. Note the stock dip late last year when PPI plunged, and the subsequent rally as pricing recovered.