Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Weyerhaeuser Company’s (WY - Analyst Report) announcement that it was selling its homebuilding and real estate company, WRECO to TRI Pointe Homes, Inc. (TPH - Snapshot Report) created some stir in the company’s share price. The shares rose a few cents after the announcement and ended at a gain of 0.1% on Nov 4, over its previous day’s closing price.

The deal between the two parties requires Weyerhaeuser to use either a spin-off or split-off transaction method, which at current levels has not been decided upon. Any method used will merge WRECO with a subsidiary of Tri Pointe.

Talking about the financial aspects of the transaction, Weyerhaeuser’s shareholders will receive approximately 130 million shares or 80.5% of the combined company’s shares and $700 million in cash. The rest of the 19.5% shares will be allotted to pre-transaction shareholders of Tri Pointe. Combining the two payment modes, the transaction has been valued at $2.7 billion.

The transaction is anticipated to work in the best interests of Weyerhaeuser’s shareholders as it will be treated as a tax-free transaction for the company. Also, separation of this homebuilding unit will free resources that the company can utilize for its core forest products business.

Completion is pending upon receipt of regulatory approvals along with the approval of Tri Pointe’s shareholders and will likely consummate in the second quarter 2014.

We believe the aforementioned transaction, when fully complete, will bode well for Weyerhaeuser’s growth prospects. Currently, the Zacks Consensus Estimate for the company is $1.14 for 2013 and $1.34 for 2014, representing year-over-year growth of 97.3% and 16.8%, respectively.   

Weyerhaeuser currently carries a Zacks Rank #3 (Hold). Other stocks to watch out for in the sector are Universal Forest Products Inc. (UFPI - Analyst Report) with a Zacks Rank #1 (Strong Buy) and DXP Enterprises, Inc. (DXPE - Snapshot Report) with a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%