Stock market trading: PRT Forest revenue declines in latest quarter

PRT Forest Regeneration Income Fund, Toronto symbol PRT.UN, is the largest producer of container-grown forest seedlings in North America. It grows its seedlings in 13 greenhouses and open outdoor compounds. PRT expects to produce about 170 million seedlings in 2011. In the three months ended December 31, 2010, PRT reported cash flow of $0.07 per unit, compared to $0.12 per unit a year earlier. The fund received payment for an insurance claim in early 2010, and used a portion of the funds to pay off its $3.7-million bank debt. That significantly lowered its interest costs. However, that was not enough to offset a 9.4% drop in revenue, to $6.8 million from $7.5 million. Western Canada’s lumber exports to China rose nearly 90% in 2010. As a result PRT plans to produce 30% more seedlings in 2011, and reopen its nursery in Kirkland Lake, Ontario. The fund plans to ask its unitholders to approve its conversion to a corporation at its annual and special meeting on June 13, 2011. PRT paid a $0.02 monthly distribution in January 2009, then suspended distributions to conserve cash. Low U.S. housing starts continue to hurt lumber demand, which lowers demand for seedlings. However, demand should improve as the U.S. economy continues to recover. If your stock market trading involves investing in aggressive stocks like PRT Forest Regeneration Income Fund, you should subscribe to our Stock Pickers Digest newsletter. What’s more, you can get one month of this respected stock market trading advice free when you subscribe now. Click here to learn how.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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