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

In the near term this is clearly facing some serious challenges. Their big main product is coking coal for the manufacturing of steel, with China being the big customer. China is going through a transition slowdown, so the price is not very good right now. It will take a little while. They cut their dividend but he thinks they will be okay for now. If you can hold onto it for a couple of years, this company will be around and will make a lot of money when the cycle turns for them.

[Caller did this trade: Sell Jan/17 $11.00 Put for $1.50, Buy $20 call for same expiry date]. He has created a synthetic position on TCK with a low price. His downside is 0 and upside is infinite. It is a good trade if you like TCK.B-T.

The major problem here is the coal business. The price of met coal is down $50 a ton from where it used to be, and doesn’t appear to be going anywhere fast. As long as that condition prevails, he doesn’t see the company going anywhere. Zinc is in short supply and that is a great positive. If he is right on the economy, copper will do better, and he believes this company has indicated they would like to make an acquisition.

He looks for sectors where there have been some macro shifts that can lead to multiple expansion going forward. In the commodity sector, it looks as though 2012 marked a cycle peak for commodities. We are into a period where money is leaving commodities in favour of investing in equities and consumer led economies. Expecting relative underperformance for commodities going forward.

Historically this does very well from October to probably through April of each year. However, this year the stock is not doing what it normally should do on a seasonal basis. It has actually established a short downward trend. Trading below its 20 day moving average and underperforming the TSE Composite. There are better opportunities elsewhere, within the base metal sector.

(A Top Pick March 6/14. Down 27.01%.) Sold his position. It is a good company and there will be a time to add it back. Selling it here was a good way to use capital elsewhere.

They are capable of buying something but he had not heard speculation of taking out HBM-T. It would mean it was going to step up in base metals. One of the most covered Canadian stocks throughout the world.

The only mining company he owns for his clients. The stock is under pressure because met. coal has been under pressure. The dividend is covered okay right now but could get cut in the future.

It has recovered nicely, but still trading at a 47% discount from book value. Decent balance sheet and good upside potential. If there is not an economic disaster it might work its way up from the lows.

Not wildly excited about the resource sector for this year. They have reported much better numbers than people were expecting. If she wanted to own base metal companies, this would be one of the ones that she would own, but isn’t sure that it is absolutely necessary at this point. She would want to see growth in China starting to pick up before buying a resource stock.

Likes it and has for some time. 1 to 3 years futures for copper are flat. He is bullish on the US economy so it will eventually do well.

Copper and base metals are still under a cloud. We are talking about better international growth, but we still haven’t got to the point where there seems to be any shortage developing in most of the base metals. Miners are getting a really good lift from lower energy costs. We have a ways to go from a technical standpoint. The stock has to get back to $24-$25 to begin to look reasonable on a performance basis. There is no rush to get into this.

Currently in a downward trend. However there are early signs of it trying to bottom. The period of seasonality is from the end of January to May of each year. It is below its 20 day moving average, but watch it closely.

If you want diversified exposure to metals, this is the way to get it. The yield of about 5% is solid. His overall market strategy is pro-cyclical, but excluding the commodity sector. He doesn’t have really strong confidence that we are going to see any sustainable uptrend in metal prices going forward.

(Top Pick Feb 5/14, Down 38.58%) He was not aware prices would come down the way they were. Everything has come against them here. They have a big cash reserve, but it is not what it was before. The dividend is safe for now.