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

Last year was a great year for a bounce in commodity prices. He believes that we are in a long-term secular bear market for commodities, meaning cyclical advances and declines without making much progress.

He used to own it and sold it. It looks compelling right now. At this price the valuation is quite interesting. You have to feel confident about the various resources they are exposed to. Met Coal he is comfortable with, but the others he is not. They have de-levered the balance sheet, selling non-core assets. It is an attractive name if you want exposure to their commodities, but he recommends against it being a huge position.

His feeling towards commodities in general is that they got overdone in their run up and their downside risk. You are starting to see that both in commodities in general and in this company. A good company, but he has no desire to own it.

We have only a handful of big Canadian companies that are really important. At this level, this is where you want to buy, but first wait for it to break out technically.

A well-regarded company and has pretty much done everything right. However, he is not overly bullish on materials companies right now. You need to see more of the basic infrastructure spending pick up, particularly in Asia, particularly in China. He doesn’t see enough of a push to get a short-term immediate catalyst right now. Doesn’t see any reason to own it today.

This has recovered a lot. They generated a huge amount of cash flow in Q1, and he thinks there is room for the dividend to go up. Now is a good time to pick away at these things for the next 3-5 years. If the theory is right, you are going to make very good money. Dividend yield of 0.8%. (Analysts’ price target is $37.50.)

Usually the best time to buy this is when everyone hates it. A high-quality company with some very good assets including metallurgical coal, oil sands exposure, copper and zinc. Like any resource company, the stock is highly volatile, and is difficult to value.

This is sensitive to coal. It is involved in a big build now on oil and gas. This is really the last of our major mining companies, other than the gold companies. You are going to get waves of commodity related performance. Good to Hold if you are patient.

A large producer of bulk commodities and base metals. He is not bullish on the base metals, etc. China has been the incremental buyer in a lot of these commodities over the last 10-15 years. Feels Chinese growth is slowing. He is not particularly optimistic on the stock.

A bit of a hybrid. It’s copper, but it is now big coal. The coal price does great. Last year there is generally an unexpected move in coal that went quite a bit higher, and he is a little nervous of that. He would only be a buyer of this if it were in the high teens.

Thinks this stock has upside. Just sold their Hydro assets for an unbelievable multiple to EBITDA, $175 million, to Fortis. The objection has been that their balance sheet has been over stretched. They’ve done a wonderful job driving that down. He sees this as trading at about 3.5X forward EBITDA. Metals like zinc and coal don’t market much attention, but a company that generates that much cash will eventually get market attention. Very well-run and has a collection of world-class assets.

The star of 2016. It began the year well, kind of rallied, and then tanked recently as metallurgical coal prices fell. Now trading at around $25 and is interesting value because of the zinc operations. When he looks at this, he looks at it as a zinc play in the near term. Medium term and longer-term would be copper. And then you get a kick in from metallurgical coal at some point. He hasn’t bought any lately, but it is quite attractive.

The period of seasonal strength is from around the middle of November, right through until around the end of April. This year, it started to go the same way, but then didn’t complete it. Chart shows a technical head and shoulders pattern, which is not good news. The implied downside risk in a trading range is from its peak to the equivalent dollar amount on the downside. Start to look for better opportunities elsewhere.

He is Short this and Long on a copper producer. Doesn’t have anything against the company, it is more about the coal space. Metallurgical coal is a commodity that has had its run. Feels that the expected free cash to be generated through 2017, are probably misguided. We are starting to see a lot of coal capacity come into the market after the run-up in prices last year.

He is not a short term investor so cannot comment on May to September. They have had a wonderful run and he would be hard pressed to see this continuing. He missed this one.