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

He is not crazy about dual class share companies. However, his view on the metals markets in general is somewhat bearish. He is looking for lower metal prices. If you want to own a company like this, there will be a better entry price.

Closed at $25.09 and his model price is $30.58, a 21% upside. This stock has been struggling and has been basing here. It can’t get above his EBV -1 level. Deflation is happening all over the world. He thinks the stock will go to EBV -3, which is in the $20 area.

BHP Billiton (BHP-N) or Teck Resources (TCK.B-T) for a long-term dividend/value investor? These trade on similar multiples. However this is very much levered to China because it has got metallurgical coal which is used in manufacturing steel. Copper and coal are there 2 big things, so if you think things in China are levelling off, this would not be as great a play.

Coal has been the big issue from his standpoint. China is a big driver for the demand for coal. There has been a lot of uncertainty. It was just a question of how much China was going to slow, which has been cooler than expected. He is not a big believer in the base metal and coal trade this year. He would like to see better signs that demand in China is picking up.

Loves this Canadian stock. But he never knows where to buy it. Support in the $23 range and resistance in the $27 range. It all depends on China, but the numbers coming out of China aren’t great. He would consider getting it at the support level or if it broke resistance.

The last blue-chip, big Canadian mine and it will participate. The negative part is that it has the coal, but on the positive side, it has the zinc and some of the other products. Thinks it will be carried along on the China craze at the end of the year. A number of these big mining companies are going to do well because China is going to show better and better numbers as we get closer to the year end. Dividend yield of 2.12%.

It is at a price where it makes sense to re-purchase. Should the met coal market recover then this one will do well. There is a major shortage of zinc, which is one of the three main areas Teck is in. Good balance sheet. He is watching for an obvious catalyst. The base metals market is basing.

When he looks at the resource space, he is looking at energy before looking at base metals. Some of these names have moved forward a bit, but this one has kind of meandered along and hasn’t done so well. Also, China is not gobbling up resources like it was 10-12 years ago.

(A Top Pick July 4/13. Up 19.48%.) Likes to own cyclical mining companies when everybody hates the commodity. Half of the global, sea borne metallurgical coal capacity can’t make money. This is a precursor to a rise in coal prices. Copper is on a bit of an upswing. There is also the hidden gem of zinc which is $1, where they make a lot of money. 3.5% dividend yield.

Sold all of his holding some months ago. Copper prices have been sort of improving, but the copper industry is still under cost pressures. 3.5% dividend yield.

Coking coal is their issue, which is extraordinarily weak, and you see it play out on their stock price. Thinks 85% of their EBITDA is from coking coal and copper. Copper is not an issue, and coking coal is about 50% of overall EBITDA. So it is very leveraged. He has a preference for nickel, copper or even zinc, especially within the next 2 years.

He bought recently because he thought the valuation was good and the penalty for commodity prices was overdone, especially coal. Sentiment towards China is improving. Have some patience.

The stock has been bouncing along at a level that is at about 75% of BV. There is nice technical support in there, and this is the 3^rd time it has hit there. Stock is cheap, but the bad news is that the earnings forecasts momentum is still running negative. This makes it difficult for the stock to get going.

Entry point of under $24, is probably not bad here. You have iron ore bumping along, and you need China’s growth for the prices to be highly profitable. They also have the copper side. He would rather wait until there were better macro signs from China. It could be flat for several more quarters. An alternative could be Hudbay Minerals (HBM-T).

This seems to be going sideways to down. Part of the problem is coal and their exposure to China. There is still growth in China, and will be for several years, but the impact on commodity prices, and therefore the mining companies coming out of the growth in China is a story of a few years ago, and not a story that is going to resurface anytime soon. This company still pays a decent dividend. Earnings this year are forecast to be just slightly ahead of the dividend, so there is a little concern that there might be a cut at some point.