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When it comes to timber, Kent Croft sees both the forest and the trees.
His five-star Croft Value Fund is up an average of 12.27 percent per year over the last five years.
"Timber is not normally correlated very highly with stock and bond markets, but I also think it's a wonderful time to get in," he told CNBC. "The reason you want to get in is sort of the inherent economics of a tree: As a tree grows, obviously the volume increases, but, also, the per-unit use of that volume increases in price."
Recommendations:
His first pick in the space is Plum Creek Timber [PCL
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], which he says holds 8 million acres.
"Just the timber assets alone...we think are worth about $62.00 (per share)," he said.
Despite a recent jump following quarterly earnings, the stock has been trading for less than $50.
"They're actually selling off some land at high prices, and buying their stock back," he added.
He also likes Weyerhaeuser [WY
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].
"The assets are there," he said. "It might take a couple of years, but we think it's a good long-term play on those assets."
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CNBC Video Reports:
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Disclosures:
Disclosure information for Kent Croft was not immediately available.
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