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

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.

We have seen a pick up in this sector overall. We are in the seasonal period for metals and mining and started to see a run up. Looking at the charts, we’ve had a little bit of a downtrend and are now having a little bit of resistance. This is actually so positive. Especially above 32$, it would be a very positive sign for it to move higher.

Has held this in the past and did very well with it, but wants to be a little more convinced metal prices are really on a discernible uptrend. With the world economic numbers looking better, that is a distinct possibility. Presently it is a bit pricey. To him, it is still in the risk areas that is outside of what he could readily accept.

This is Canada’s remaining really great mining company. It is very well managed. It has been run by the same management for many years. It has Zinc, Copper, and oil sands. You could buy it for $7 twice in the last 10 years. This kind of cyclicality can lead you to doom.

A well-managed company with a good balance sheet. They recently announced a special dividend and buying back shares. Like other resource companies, they are dependent on the price, in this case coal.

Thinks this is going to go much higher. It’s gone from around $20 to $30 and has a lot more to go. The chart shows a slight downtrend from the beginning of the year. If that can be broken, that is pretty positive. It has had a basing pattern, a kind of a modified head and shoulders. If it gets above $32, he could see a nice move to $40. $26 on the downside would be a great chance to pick it up, but don’t wait.