Kyle McKay BHP Billiton BHP-N BUY Mar 19, 2007

It has been oscillating up and down with big swings. The sector is interesting and is good to look at if rates go higher. A deflationary theme will cause it to reprice.

Focused on large deposits. Best company in sector. Global brand. Predictable moves in market. Will benefit from China stimulus. If US dollar falls, commodities will rise (good for business). Excellent commodity mix. Would recommend buying on weakness/selling on strength. 

Massive scale allows for very good asset acquisition. Attractive stock price right now. Very strong dividend. Commodity cycle presenting a good opportunity (trading at lows). Best time to buy is when nobody "likes" mining stocks. Sell this company once cycle turns around. 

The caller wanted a comparison of the two companies, BHP and FCX. BHP is in a tight trading range with a lot of trading. He doesn't see much upside and there are others to buy. FCX has more copper, and copper is a good story It could be a good buying opportunity but sell if it goes below $44.

Mining shares have been on a tear recently; copper and gold have performed exceedingly well. Outlook for mining materials is still probably OK. Especially if Trump is re-elected, there's the belief that there's going to be more growth going forward, and this is what typically drives the mining sector.

He doesn't have a lot of this type of exposure. He tends to gravitate away from any company whose earnings and revenue depend on a tradeable commodity; makes it very difficult to predict cashflow 5-10 years out. It doesn't mean that the shares can't be accretive, but the path to cashflow is less visible.

In basic materials, iron ore's had a hard time partly due to slowdown in China. And that's a big part of its business. Longer term, we're in early stages of a long-term bull market in commodity prices. Big cashflow generators will pay a lot of dividends along the way. Mixed economic data before an easing cycle impacts this company.

He prefers copper. Owns TECK.B, a bit frustrating, but he can see the runway.

Is down 6% the past month due to China. Until China's stimulus plan has an effect on their economy, mining stocks like this will stay under pressure.

Likes metals and mining longer term, if we have the broader 4-year cycle reset. With inflation expectations and supply chains breaking down, likes commodities. Looks like a pretty good longer-term entry point, and you can pick away some more during a bigger correction (perhaps later this year).

The commodity price and tariffs happened. He sold half his position at $70 a few years ago. He will double his position at $40. Wouldn't sell it here.

The largest miner today, in iron ore and copper. Mining is risky; it takes a long time to see if whatever you dig out of the ground will sell. He likes BHP's diversification. Iron ore is in safer countries, copper not, so BHP is attractive in this way. There remains good demand for copper. Trades at 12-13x PE and nice balance sheet. but a little risky.