Potlatch Deltic (PCH) small-cap REIT with unusual call buying on 11/19 with 1000 January $45 calls bought for $1.75 to $1.80. Shares are forming a nice weekly bull flag under $47.50 after a strong run from the March lows and a breakout targets $55-$60. The $2.86B company owns 1.9M acres of timberlands throughout the US as well as sawmills, a plywood mill, and other facilities to process timber. PCH is highly-levered to lumber prices which has pulled back off of 52-week highs lately but rebounding since late October. PCH is realizing better prices per MBF in 2020 and every $10 move in the underlying drives $12M in EBITDA, so a run higher would be very positive for their outlook. Lumber has significant tailwinds from higher housing demand and starts, growth in building permits, and declines in Canadian imports. PCH is also an interesting ESG play. The company has committed to re-planting seedlings, utilizing the entirety of their logs, investing in sustainable forest management practices, and protecting wetlands and wildlife. RBC upgrading to Buy in July noting that they’re positive on the company’s “very strong” North American softwood lumber markets as well as the impact of record-low long-term interest rates and the “still active” market for high-quality timberland parcels. PCH is also an excellent allocator of capital. Shares trade 26.5X earnings, 3.15X sales, and 19.2X cash. PCH has a 3.5% yield.