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

He likes what they have done in terms of containing costs. They are a good way to play zinc. All these base metals have had a good run off positive numbers in China. He would hold it and let it pull back here and then buy more. He likes the outlook for zinc.

Had a huge downdraft in 2015 and recovered nicely in 2016 with a huge run, and then finally gave up the ghost. It has 3 commodities, metallurgical coal, zinc and copper. Met coal hit $300, fell back to $150, and is now rallying up to $200. Commodity stocks are hard to investment in unless you buy right. The nice thing about this one is that for the near term you have met coal which has stabilized at much higher prices than anyone anticipated and generates lots of cash. Most important though, over the next 6 months, zinc looks very, very tight. Then when you get out to 2020, 2021 and 2022, copper looks to be in significant shortfall, and this company will play that, especially with their 2^nd project of QB2. Also, the company has fixed the balance sheet. He would like to see a bit of a pullback.

Very strong seasonality. The best time is from October through to early January. Right now, there is a little bit of concern. The chart shows it is coming under some pressure and is currently in a downward trend. It has some seasonality coming into the summer until around the middle of July. It then has a selloff period through until October. This might be an opportunity to get out.

Overall, a great company. Has good leverage to global growth. To a large extent, the glory days are behind, because he doesn’t think we are going to see the infrastructure boom in China or India any time soon. A good, solid company with a decent balance sheet. It is probably fine, although it wouldn’t be his 1^st choice.

He intends to hold it for at least 18 months. He is attracted to the coal and copper exposure. He also likes their heavy oil operations. We are in the early stages of a bull market. They have fine processing facilities. He takes Chinese prognostications with a bit of skepticism. He just watches commodity prices. If copper prices don’t rise we won’t have the ability to transmit electricity.

Metals are starting to see a little bit of life. Chart shows a neckline break at around $26, which is pretty much game over. Now it is kind of bouncing off the current level. If you are a technical person, you can buy this right now, but you have to let it play out. If it breaks the neck line, it could be a great play.

The fair market value is quite high, relative to the current price. If there is any change in the market towards the resource sector, this is a stock that could do quite well. He could see it going to $34.

This has done fairly well over the last couple of years. They are a much different company than they were 10 years ago, when they were largely exposed to coal and coal shipments. He sold his holdings about 6 months ago. The markets they are involved in are extremely unpredictable. Met coal is very interesting, but China is producing at record rates. This would not be his choice within the sector.

This just had a Buy signal, because it broke out of one of his structural levels. His model price is $68, 190% of yesterday’s close. Earnings estimates are $4.17 this year and goes down to $3 next year. He has had Sell signals all along, and this is the 1^st Buy signal he has had. If you are a trader, he would be Long the stock.

A very late cycle type of stock. We saw a very big move in the name so he would be very hesitant to move back into it. The balance sheet risk has been taken out of this story.

The main commodity this company produces is coking coal used in making steel, which had an unexpected huge run, and enabled them to make a lot of money and pay off a lot of debt. As a result, the balance sheet is in good shape. Coal has probably stabilized at the current price. They are also exposed to copper and zinc. It all depends on your view of these commodities. He is quite bullish on zinc and reasonably comfortable with copper. There could be more downside on coking coal.

He just covered his Short of $20 a couple of weeks ago, and this has bounced nicely. If you want to own base metals, focus on copper. In bulk materials, particularly coal, there is a dramatic supply response to the run-up in prices last year. It is not a particularly difficult mineral to mine. Also, this company is very sensitive to a strong Cdn$.

This has met coal, copper, zinc and oil. People are forgetting the zinc story. Zinc is really, really tight and is just starting out to see a run. 3 years out, copper is going to be very tight. Met coal is $140, and their costs are $90. Dividend yield of 1%. (Analysts’ price target is $37.)

Steel stocks have been beaten up and he plays it through an ETF. You have Met. coal in TECK.B-T and so he thinks there is downside potential. He would sell into rallies.

The stock shot up when demand for met coal was strong, but that has now passed and we are really waiting for base commodities such a zinc, copper, etc. There really hasn’t been a major change in the commodity cycle just yet. It will come, but it may not be for a couple of years.