Arbor Day: Virtual Tree Planting

The low rolling hills of Nebraska stretch for miles, treeless and punctuated only by a few Pawnee Buttes sand cherry shrubs.  In the 1805s when Julius Sterling Morton reached the Nebraska plains with his bride Caroline, he was driven to begin planting fruit orchards and wind breaks.  A newspaper publisher and later politician, Julius used his bully pulpits to encourage tree planting.  He made such an impression on his Nebraska neighbors that Arbor Day was declared a state holiday for the planting of forest and fruit trees.  Within twenty years all but one of the other states had followed suit.  Schools took the day a step further by adding dedications for special people to each tree planting.

Morton was onto something…and so were the children.  In 2020, the wrinkle of social distancing to stamp out the coronavirus gives Arbor Day new relevance.  Habitat destruction and global warming are two environmental concerns that have led to changes in distribution of viral disease and the transfer of disease from wild animals to humans.  Besides offering a diversion compatible with social distancing, tree planting provides a long-term solution to the underlying environmental problem. 

It is also an interesting proposition for the investor with a green stripe down their back .

The Arbor Day Foundation set a goal of planting 100 million trees by 2022.  Yes, virtual tree plantings are possible.   The Foundation asks tree lovers to post a picture of a tree on popular social media platforms such as Twitter, Instagram and Facebook with the hastag #ArborDayAtHome and tag @arborday.  The Foundation will plant a free in a U.S. forest on your behalf.

West Virginia

Tree planting can make a difference.  Patrick Angel of West Virginia has made it is personal mission to bring trees back to abandoned Appalachia coal fields.  Angel has been instrumental in planting more than 187 million trees on land left bare by coal mining operations.

Investors might be interested in who raises all those little trees.  There could be gain in making capital available to responsible forestry and seedling companies helps ensure a supply of trees for the future.  If few names come to mind it is because seedlings are largely a private matter.  Numerous small enterprises are involved with raising tree seedlings, distributing them wholesale to greenhouses and home improvement retailers or selling them locally.  

Timber management is a mix of public and private enterprise.  Privately held Lyme Timber manages a portfolio of 1.5 million acres of timberland across the U.S.  The company has place 95% of its holdings into conservancy and all of its holdings are inspected and certified by sustainable forestry programs.  It is possible for select investors to get toe in the door at Lyme Timber through one of their pooled private equity funds.

Just to mention a second private name, Land Life Company is based in Amsterdam.  The company’s goal is to replant two billion hectares, from which the company can earn carbon credits.  No word yet from Land Life leadership on whether the current coronavirus threat is an obstacle to reaching a near-term goal of planting three million trees in 2020.  Land Life completed at Series A financing round in 2018, to support its plan to reforest degraded land.  It would seem that another financial round will be necessary for Land Life, giving the more assertive investors a chance to get involved.     

There are a number of ‘tree’ related public companies that make living planting and harvesting trees.  Three at listed with stock symbols and market data in the table below.  Close scrutiny is required to monitor whether these companies are actually following sound forestry management practices            

SELECTED FORESTRY AND SEEDLING COMPANIES
Company	Symbol	Operations	Price	Market Cap
Conifex Timber	CFF.TO	Timber harvesting, reforestation, forest management	CN$0.44	CN$21.6 M
PotlatchDeltic	PCH	Timberland management, harvesting and lumber cutting	US$32.14	US$2.2 B
Weyerhaeuser	WY	Timberland management, harvesting and wood products	US$19.61	US$14.6 B

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.