Not only are consensus EPS estimates strong for fiscal year 2013 at $1.23 per share, but the growth is expected to continue into next year as evidenced by fiscal 2014 estimates of $1.49 per share.

Given that Bloomberg expects Weyerhaeuser to report revenue for fiscal 2014 of $8.9 billion, this stock can yet be undervalued if the company is able to meet this revenue target along with EPS estimates of $1.49 per share.

Weyerhaeuser's average P/E over the past couple of years has been 33. With fiscal 2014 EPS projections of $1.49, this stock can possibly reach a fair value of $50, which would make the stock a strong buy today.

Bottom Line

Weyerhaeuser (the surname of co-founder Frederick) has a solid market position when it comes to timberland and wood products. The question, though, is what phase of the recovery the market is in. Given Weyerhaeuser's strong first-quarter performance and solid second-quarter guidance, I won't dispute that this century-old company is growing and should continue to be a solid play in new home construction/rebuilds.

On the strength of a sustained housing recovery, including 2013 housing starts, which is at an estimated 990,000, there's still plenty of justification for long-term bullishness. In the near-term, however, the stock might need a breather, and a slight pullback, possibly to $27 per share, would be a great point of entry.

At the time of publication, the author held no position in any of the stocks mentioned.

This article  was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and the founder and producer of the investor Web site Saint's Sense. He has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.

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