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

Doesn’t own it. With worldwide growth, it hit a run. If it pulls back, they would take a look at it.

Previously, he’d been unhappy this had not managed to break out of its downward channel, but it finally did. When that happened, it changed the picture from bearish to bullish, and is now on its way to go to higher prices.

You would think with a global expansion for a year or so that commodity stocks would be doing better. They are not just yet. The focus is industrials and technology. If the expansion continues you should see scarcity in resources and pries should improve.

When looking at the material side of things, we are getting into the mid-to late stages of the cycle where materials really start to move. When looking at emerging markets, demand is increasing for steel and metallurgical coal, which is going to help a company like this. If you see a decent pullback to $32-$33, it’s a name he would start to consider.

Recently announced they were having problems at their Elk View coal facility. It hasn't shut down but reduced capacity, but nonetheless it represents a significant portion of their overall coal capacity. The recovery in met coal lately, has been a lot of the driver behind the advance in this company. This is now more a "wait and see" attitude. He would like to see it correct another 10%-15%, which would make it more interesting.

The closest thing to the old-fashioned majors we used to have, in copper. Has a huge cash flow and the debt is under control. The mines are probably not the best, but are good enough, particularly in an environment where copper supply is getting critical. This company should stay strong, but you are going to see it trade like anything else. If the metal situation weakens, you might get it moving down a bit more. This is your best in Canada.

This is in pretty good shape at the moment. With the move to electric cars, it should double the world's copper production. This has very strong copper assets. Also has very strong zinc assets which are doing very, very well at the moment. Metallurgical coal is doing fine. Everything is moving in the right direction for them at the moment. It's a well-managed company, but highly cyclical. The stock will probably do fine for the next 6 months or so.

He just had a positive transit this week. The last time he traded this was in 2012. His model price is $79.33, 100% higher than where it is currently trading. This is a cyclical, so these prices really never go to where the fundamentals are. EBV + 3 is $70, which is where he traded in 2011.

What should I do with this? You have the ability to make a good short-term return, so he wouldn't sell it. It looks like it wants to break out of a trading range. A cyclical rally in the market, and materials has shown up as a top overweight by many strategists, so he thinks money flows into this sector. This is quite a volatile stock, so you probably want to hold this. You'll probably hit some headwinds at about $40, which is where you want to sell it.

Fort Hills does not make a huge difference but he thinks the diversity of their commodities is good and the market does not recognize it in their price. They have Zinc, Copper and Coal as well. Having that diversity of products in a company that now generates free ash flow, he thinks it makes it pretty good value. He would not be shy buying it at these levels. It is setting up to be a pretty nice play for the long term.

Chart shows a breakout at around $32. You could buy this right now. Expect a little volatility. The one thing you can do to insulate yourself from a drop is to just buy half now. All the indicators are turning up. The short ones are a little overextended. If it got anywhere near $32, it could go right down to $29 without impairing this move. If it got above $35, then you could buy your 2nd half.

Had a very nice run to get back to a level where it has had all kinds of problems getting through. It has tried to get through the $34 level for many years, and can't get through. He would take some money off the table.

Chart shows a big decline from early 2014, with a very nice break out in early 2016. It is currently doing some consolidation. However, it’s taken too long for the stock to be still trading in the low $30s. If the chart was bullish, the stock should be much higher. It is still going sideways in the low $30s. He doubts it will go much higher in 2018, and will probably go sideways on the either side of $30. If you see it at $33 or $34, that would be a good place to sell your holdings.

It’s cyclical but he thinks its a good time to get back in. The return on invested capital in the last 2 years has improved from 1% to 3% and now in Q3 it’s at 7%. It’s going in the right direction, the valuation is quite reasonable, you got the commodity prices, mostly coal and copper, going in the right direction too. Things are going in the right direction, he really likes it.

The big global trend right now is to have synchronized global growth for the 1st time in a decade. That all looks good and this company can usually rise into that. If he had to play catch-up on being left behind in resources, he would have to own this because it is a big Canadian company going from $20 to $30. We are over halfway through the cycle when you are going to be rolling out of these things. He’s lowered his mining exposure dramatically, because he can see other things he can do with his money.