While his main focus is on tech stocks, Paul McWilliams also looks at other sectors for his Next Inning advisory, such as his recent commentary on Plum Creek Timber (NYSE: PCL).
"Plum Creek is an interesting real estate investment play. It is primarily a timber company that just happens to be the largest private for-profit landowner (in terms of acreage) in North America.
"As such, its business model is to buy property that is primarily good for timber and sell off portions that are more attractive for development.
"The negative for PCL is obvious today: The demand for building materials (lumber) is slack and real estate prices are depressed.
"However, we saw an uptick in U.S. building activity in the September data and even though Russia says it will delay adding tariffs to lumber exports for now, the threat still looms.
"While I'm not banking on much from PCL in the short term, I believe the PCL story continues to merit consideration from long-term investors.
"PCL has sound management, an attractive DRIP (Dividend Reinvestment Plan) and products that, over time, will see rebounding demand. In addition to these positive aspects of the PCL story, while we wait for lumber demand to rebound, PCL's "inventory" of trees will continue to grow.
"Last February, I suggested that readers consider PCL a potential strategic investment, but wait for opportunities to carefully build a position on dips into the low $30's setting cash aside to the potential of another drop into the $20's.
"The short story here is that the tug-of-war between the bulls and bears has resulted in higher than usual volatility and provided several opportunities to accumulate PCL in the $20's.
"In the short-term, I've got no particularly grand expectations for PCL beyond the volatility we've seen during the last six months. As a result, I'll simply continue to very carefully accumulate on weakness (for me this means dips into the $20's) and let its DRIP plan work its magic."
