A lump sum investment in 1990 in the common shares of Avenor Inc. would have produced a compound annual rate of return of -4.41% if the investment was divested on April 28, 1995. A lump sum investment in 1990 in the common shares of Boise Cascade Corp. would have produced a compound annual rate of return of 1.90% if the investment was divested on April 28, 1995. On April 28, 1995, the closing prices for Avenor and Boise were $CDN 26.25 and $US 32.75 respectively.
Avenor Inc., the former Canadian Pacific Forest Products Limited , manufactures newsprint, pulp, white paper, and lumber. I expect an investment in Avenor will produce a compound annual rate of return of 9 to 14% over the next three years.
Boise Cascade Corp. manufactures paper, coated papers, newsprint, and
pulp. I expect an investment in Boise Cascade will produce a compound annual
rate of return of 15 to 20% over the next three years. In fact, I see real
value in Boise Cascade. In rough numbers, Boise has only 40 million shares
chasing the profit from a sales engine of $US 4 billion dollars annually.
A holder of a single share will be entiltled to the earnings on each $US
100 in sales. Given the dramatic recovery in the forest products sector
of the economy, the more debt - the better, and Boise is well positioned
with $US 2 billion dollars in debt with $US 4 billion in assets.
Click here to view Table 1.1 Comparative
Earnings Performance.
Click here to view Table 1.2 Price Earnings
Ratios.
Click here to view Table 1.3 Record of Common
Dividends.
Click here to view Table 1.4 Financial Position
and Capitalization.
Click here to view Figure 1.1 Balance Sheet
Ratios.
Click here to view Figure 1.2 Earnings and
Retained Earnings Statement Ratios.
Click here to view Figure 1.3 Combined Ratios.
Click
here to view Figure 1.4 Value Ratios.
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