PCL - Plum Creek Lumber, one of my favs, got tagged today on the following downgrade:
Analyst actions also drove some activity on the trading floor Friday. Plum Creek Timber Co. dropped after
UBS Warburg downgraded the company to reduce from buy and forecast that Plum Creek may cut its
dividend in the range of 25% to 50%. If dividends are lowered, the firm sees Plum Creek's shares dropping
to $24. The stock, which trades on the NYSE, dropped 2.34, or 8.1%, to 26.40 on the news.
PCL is a REIT, and must pay out 95% of its income. Its current yielding over 8%. Its projected earnings are quite a bit below its current dividend, so some dividend action might be warranted. However, this is a premier timberland company, ownint 7.8 million acres of timberland in the US, is very well managed, and is an excellent growth company (heck, its inventory grows 5% a year automatically). So, while this might be a temporary set back, I still see PCL as a core long term holding. larry |
