Rayonier trades below private timberland value
The bull case for Rayonier is that it trades at a deep discount to its private market timberland value, offering a high-quality, inflation-resistant store of value.
The argument
The guest argued that Rayonier owns 4 million acres of timberland and trades around $20 despite an appraised private market value of $30 to $40. The discount exists because it is a boring timber REIT that public markets struggle to value, but the company is actively buying back shares to accrete value.
The thesis, stress-tested
✓ What validates it
- ✓Share buybacks accelerating at discounted prices
- ✓Private market transactions validating higher per-acre valuations
▸ Risks discussed
- ▸Low return on assets typical of land holdings
- ▸Fluctuations in timber prices
Hear it yourself
"That's the best kind of risk control and alignment there is. Engaged, it can mean a lot of things. We prefer to work with these companies we invest in behind the scenes. They take the credit. They grow and realize the value per share, and we win together. But sometimes that engagement will, you know, spill out into the open a little bit, and that's okay. And hopefully, that can be to the benefit of everyone involved. Value, of course, that can mean many things. We define that by business people price. Business, we wanna have a great"
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