Opinions Lyle Stein
Teck Resources Ltd. (B)TECK.B.TOCOMMENTSep 26, 2017
Lyle SteinStock price when the opinion was issued
As of Sep 16, 2026. Market Open.
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The question was on the Teck Anglo merger.To maintain copper exposure Teck Resources would be a great asset but it has meandered around through some different things. if you are a Teck holder you wouldn't want the Anglo exposure. You could sell and re-deploy the money in safer places or just hold the cash.
What we've seen is just a supply response -- there's just not a lot of copper out there. But we're going to need it for a long time. It's a great play, but it's already reflected in the stocks and they're not as cheap as they were. He owns a bunch of them.
Likes HBM, LUN, CS (though higher risk), TECK.B with its Anglo merger. You can own them all, but FCX is probably the best bang for your buck right now.
Canada's largest producer of base metals. Geographically diversified. Cleaned up and greened up. Sold its coal business and oil sands. Likes the merger with Anglo, making it a global top 5 copper producer with 6% global market share. That'll put it on the radar of more investors. Likes organic growth prospects.
Arbitrage spread of 9% between current share price and value of the merger price. Good margin of safety. Secular tailwinds for copper demand in the face of a very difficult supply picture. Copper's approaching all-time highs and will probably push through. Yield is 0.52%.
Brian MaddenHe doesn't own resource stocks, because they lack a consistent return on capital and they carry a lot of debt. Also, resource stocks rely on commodity prices which are beyond their control. Doesn't know about the tax situation in this merger.
The new combination of companies could be quite good, looking beyond the QB2 problems.
David BurrowsLong-term outlook for TECK.B on its own is very strong. If merger gets done, it'll probably become a very important copper name for institutional investors around the world. Disappointment in QB2 mine over the last year, and that's why it's considering this deal. Those issues will get fixed.
He'd be a buyer here.
David BurrowsBroke out of long-term downtrend, working its way higher. That breakout was driven by the takeover offer. Stocks of companies being taken over often rally to the offer price and then just flatline.
But copper today is $5, good commodity price support. So in this case, could see some movement (and in the sector) if it trades off the commodity price. If copper blasts through $5, could lift the copper stocks.
Founder is all for the merger. Another chapter to be written to the takeover story. Could be an interloper for either Anglo or Teck. Don't buy here, but if you already own, it's worth holding onto for the optionality. Something's going to happen, and it's more likely to be to the upside than that the bottom falls out of the stock.
It's a no-premium deal. Disappointed a number of investors. Looks like a sewn-up deal with respect to insiders and politicians. He likes copper, and it's harder and harder to find. Likes prospects and synergies for the combined mine in Chile.
He doesn't own mining companies, as they tend not to be good businesses. This one looks interesting if you want some copper.
Looking at the commodity spectrum, this one comes right to the top of the list, because of the 3 stools, metallurgical coal, zinc and copper. Met coal tanked 2-3 years ago and had a remarkable recovery at over $300 a ton. Collapsed to $150 a ton, and is now trading at around $200 with a bias to probably going lower. That kind of spooked the street. What was forgotten is that this is probably the largest zinc producer, and is trading at multiyear highs. Inventory of zinc globally is about 11 days. Where zinc is a play today, copper should be the play 2-3 years from now. The price is pretty attractive. He would be looking to Buy more than to Sell today.