Avarga Ltd (SGX:U09) is set to benefit from the huge spike in lumber price. Avarga Ltd is an investment holding company and its crown jewel is Taiga Building Products Ltd, a wholesale distributor of building materials in North America. Increase in homebuilding and renovation demand, combined with production cuts due to Covid-19, has caused lumber prices to hit an all time high at $830.9. Therefore, this will have a positive impact on Taiga’s top and bottomline. My valuation showed that the fair value of the company could go up to as high as $0.52, depending on the recovery of North America’s housing demand and the sustainability of high lumber price. Lumber Price as of 4 Sept 2020

Taiga Building Products Ltd

Established in 1973 and listed on the Toronto Stock Exchange in 1993, Taiga is Canada’s largest wholesale distributor of building materials, such as lumber, panels, doors, engineered wood, roofing and others. Its products are mostly used for new residential landed residences and for renovations....