Five interesting things that Hodges Capital research analysts discovered this week...
#1 WHAT WOOD YOU SAY: Weyerhaeuser, a 125-year-old company, is the largest private owner of timberland in North America, with over 10 million acres (the next four largest owners combined also total about 10 million acres). Its holdings include valuable tracts in the Pacific Northwest, where it owns more than two million acres. The company operates 33 manufacturing facilities and is the No. 2 producer of lumber in North America, the fourth-largest producer of oriented strand board, and the leading producer of engineered wood products. The company’s growing Natural Climate Solutions unit includes leasing land for solar and wind farms, generating carbon credits, and participating in carbon capture initiatives. Unlike oil and other commodities, timber is not a wasting asset, with trees growing roughly 2.5% per year. Weyerhaeuser plants 100 million new trees annually and harvests just 2% of its forests each year, creating a massive carbon sink—likely the largest in the country. Lumber prices have fallen 20% this year to roughly $550 per 1,000 board feet, driven by weakness in two key—and currently depressed—sources of demand: new-home construction and renovation and remodeling activity. (Vestmo)
#2 THE TERMINATOR CAME BACK TO… SHOP? This holiday season, shoppers are increasingly turning to AI chatbots. A recent Shopify survey across high-income countries found that 64% of consumers plan to use AI tools while shopping, a figure that jumps to 84% among those ages 18–24. A McKinsey study found a similar trend: shopping is the second-most prevalent use of generative AI, trailing only general research and ranking ahead of writing. Consumers are using AI tools in a variety of ways, from hunting for discounts and coupons to discovering new products and comparing options. Chatbots tend to perform best when recommending items with clear technical specifications, such as smartphones, and are less effective for more subjective purchases, such as clothing. (Hedgeye)
#3 SLOW MIDDLE LANE: While 2025 is shaping up to be a lean year for private equity fundraising, the downturn is hitting the middle market particularly hard. Allocators are cooling on the segment, and mid-market GPs are seeing exits lag the broader PE industry. Both total capital raised and the number of funds closed through September came in at less than half of last year’s total. At the current pace, 2025 is poised to break from the robust mid-market fundraising seen over the past three years, each of which surpassed $140 billion on an annualized basis. Through the first three quarters, PE firms closed 88 mid-market funds—defined as those raising between $100 million and $5 billion—according to the Q3 2025 U.S. PE Middle Market Report. These funds raised a combined $71 billion in commitments. Over the same period, PE firms realized $78 billion in mid-market exits, defined as deals valued between $25 million and $1 billion. That figure represented just 29% of total PE exit value, the lowest share on record. The long-awaited recovery in PE exits was derailed earlier this year by a series of macroeconomic shocks, most notably tariffs, which have placed disproportionate pressure on smaller businesses. (PitchBook – The Daily Pitch)
#4 TAX REFUND WINDFALL: The One Big Beautiful Bill Act (OBBBA) will effectively compress two years’ worth of individual tax cuts into one next year. Individuals will benefit from retroactive tax cuts for 2025, paid out during the January–April filing season, along with lower tax withholding throughout the year. The combination of $91 billion in retroactive tax benefits and $100 billion in reduced withholding is expected to boost GDP growth by approximately 0.3% in 2026 through increased consumer spending. Growth in the first half of the year could be as high as 0.5%, depending on how quickly tax relief is spent. Altogether, refunds and lower withholding could raise incomes by roughly $1,000 per tax return in the first half of the year. (Piper Sandler – Macro Research)
#5 LEAVING ON A JET PLANE: U.S. outbound travel continues to materially outperform both domestic lodging demand and inbound travel, with November data reinforcing that divergence. While overseas outbound volumes decelerated modestly in November following a very strong September–October period, absolute growth remains healthy and well above inbound trends. Inbound travel, meanwhile, remains weak and continues to deteriorate, consistent with ongoing pressure across U.S. urban and gateway hotel markets. Fundamentally, little has improved in the U.S. hotel demand backdrop, and sustained outbound strength continues to redirect discretionary travel spending toward international destinations and cruise itineraries. (Hedgeye)
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