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

It is going through a really tough time. He has trouble finding a reason to own it through 2016. Copper will struggle to stay above $2. Met Coal is taking it on the chin. The balance sheet will become highlighted because of the difficulty generating cash flow. Prefers LUN-T.

(Sell?) This has a very strong correlation to the Bloomberg Commodity Index, which has been going down. Have been reducing their cost structure, closing high cost mines. They don’t have any debt maturities until 2017. They have liquidity on the balance sheet for now. Feels this is the wrong time to be panicking and selling. Hopefully things will stabilize and then you can have another look.

He is not brave enough to buy it. Something in the coal market would have to change radically. A lot of take-or-pay contracts have expired. He hears India wants to build 100 to 200 coal powered generating plants.

Metallurgical coal, copper and lead. The coal and copper goes to China. You really have to believe China is not falling apart. They say they are growing at 6.8%, but everything else tells you they are growing much slower. 49% of their GDP numbers is investment driven. The US GDP after WWII, when they were growing like gangbusters, investment as a percentage of GDP was 25%. There is no way that China can keep going the way they are. Doesn’t think this company is going to grow that quickly.

A mining stock. Biggest product is metallurgical coal, but also has copper and zinc, etc. A good company, but with commodity prices where they are, it doesn’t matter. He is not going to own any metal stocks until things are better. If things stay down for a protracted period of time, this company could get into financial trouble through no fault of its own. He is no rush to buy this or any other metal stock. Wait until metal prices bottom out.

If you are looking to put a toehold back into natural resources, he thinks energy is a way to play it. He would say Sell, and have a look at his Top Picks. He thinks energy bounces back first. (See Top Picks.)

If you own and need tax losses, he would sell this and then buy it back 30 days from now. The longer-term issue with this company is the outlook for coal, which is pretty dismal. You are then looking at copper, zinc and things like that. Longer term he is more optimistic on copper and certainly zinc. Down at this price, continue to hold.

All of the metals they are in have been difficult. When it has gone down this much it is hard to sell it. New money in the metals space should go elsewhere. LUN-T and HBM-T would be his referred companies.

It was curious when back in September they only took a write off of $2.2 billion, which is nothing to this balance sheet. It’ll be interesting at year-end whether a write off comes off. Large write-offs have to happen here, and that would be a positive.

It is underperforming the market, is in a downward trend and the relative strength is negative. It will be under tax loss pressures until December 24^th. It does have a history of bottoming in the last week of December. Be patient. It is too late to sell.

If energy goes up, this one will go higher, but he does not think energy will go up. Met coal will still be going lower. Copper is low. The balance sheet is a problem.

This is one of the trickier ones. Mostly coal and metallurgical coal, with an oil sands big project. Still had a huge amount of debt to buy their Fording coal assets. The argument is that there is just too much steel. China has gone from almost no steel production to over 50% of global steel production. They don’t make steel to build themselves, but they make it to sell to us. There is way too much capacity in steel. This has been on side because of the Cdn$, but if we really don’t know how low the commodity goes and they have that much debt out, they are still in trouble. He prefers Labrador Iron Ore Royalty (LIF-T) and Westshore Terminals (WTE-T).

The balance sheet on this is ugly, so there are major dangers. This could have another spectacular recovery. It is on his watch list. He can see this is a good speculative play in a major corporation and a leader in its field, but he certainly wouldn’t be over weighting it.

This company is sensitive to coal; copper and zinc prices and all are lower right now. It is in a downward trend, underperforming the market and momentum indicators are negative. Copper and Zinc prices over the last two weeks have showing signs of bottoming. If the stock shows signs of bottoming and base metal prices recover, this could be an excellent candidate.

Big debt, big problems and selling a lot of the commodity that the world wants to stop using. Even if they do turn it around, it’s like you are swimming upriver. Doesn’t think you need to be here.