Teck Resources Ltd. (B) (TECK.B.TO)

This is the best mining company in Canada to be in because most of its assets are in North America. This provides relative political stability. The problem is that commodity prices are not currently doing well, and investors should only want to own miners when their commodities are going up or stable, or when the prices are in the pits and people are giving the stocks away.

Solid company. This will be really good to buy when copper bottoms. Copper has been pulling back. Don't buy now, but watch it.

Mining companies are difficult. There is going to be high demand for it. If he was looking at a mining company this is the one he would look at.

He put it in his model portfolio this year. He thought it would get through $38 and make it to $64. The fair market value is huge. Unfortunately resource stocks tend to be cheapest at market tops. It has a nice balance sheet and he thinks the value is there.

There has been a tail wind in the commodity sector as of late. They have done a great job to deleverage their business. As China slows down this could cause some issues. It is fairly valued here.

He owns mining companies only once a decade because he cannot forecast the price of resources. Also, miners tend to start to invest with cash flow whenever the commodity price goes up so when it goes down again they get saddled with it.

The sector has been consolidating, but the basic materials should participate in the next move higher. They have a great collection of assets to participate in the next move up. He would first like to see a move higher before jumping in, particularly in the base metal prices.

He believes in a future commodoties play and feels this stock will return to old highs. This is a trade, not a hold, because the sector is so cyclical.

You have to wait a while like 3-5 years to see how trade patterns will shake out. This is being--and will be--impacted by tariffs and trade wars. Commodities in general are entering a volatile period. Long-term, Teck is a good company
and has improved over the years. They're well-diversified across copper and coal.

Base metals could benefit from any trade war positive news and could see a $7-$8 move quickly, which would test resistance near $39. Seasonality is working against the base metals at the moment until October. He likes this as a good long term risk-reward, but it could potentially re-test the $22 range.

Is the metal run over? Full-scale tariff war will make the world economy and the metals suffer. Don’t want to be in metals if there’s a recession in 2019. Has a big coal component, which world is moving away from. Reasonably priced, but not a lot of upside. (Analysts’ price target is $42.24.)

It is a contrarian value play. They took on a lot of debt and made too many acquisitions last cycle but now they are not and it does not look that bad. This is a cash machine and they will return cash to shareholders. He thinks there will be a special dividend at some point. (Analysts’ target: $42.06).

He has owned this twice and they have traded it poorly both times, he says. It is a great resource company when the underlying commodity prices are doing well. Unfortunately copper is now at a 9 month low and coal could be being impacted by the trade concerns. Zinc is at a 52 week low, too. (Analysts’ price target is $32)

They generate a lot of excess cash. Coal has traded in the 250 + range for a period of time. These guys produce 24 million tons a year. That was a bonus. Copper price has been sloppy lately. Global growth is slowing. That is putting a pall on the base metals in general. Balance sheet is strong. He wouldn’t be putting money here now.

The problem lies with China. He doesn’t know what is going on with China. The market is pricing the risk of a recession next month. If that doesn’t happen, the stock will fly.