Trevali Mining Corp (TV.TO) Buy, Sell or Hold

Trevali Mining Corp (TV.TO)

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-0.00 (0.00%)

49 watching

HOLD

Zinc producer, less focused on exploration and more on operations. They continually missed on guidance so the management team departed. He sees a lot of value down here. There is a potential for them to get back to where they were. You have to look at Q2 and 3 this year.

DON'T BUY

This stock has got hammered. It is a pure play on zinc. Zinc prices have rallied lately because zinc inventories are tight. It is a pure play on 1 commodity and that commodity has gone through its cycle. They took a big write off in the 4th quarter. There will be another zinc cycle, but not sure when.

DON'T BUY

It has ties to the zinc market, which has been under severe pressure from tax loss selling. HBM-T would be a better replacement if you want to be here.

HOLD

A zinc producer that completed a round of financing around $1.30 share price. He started buying around $0.65. They have had some problems with one of the mines out east. You have to be a believer in the zinc commodity market for this one. He has been adding to his position and expects the zinc market to strengthen going forward. Glencore owns about 30% of the company. He thinks it is very cheap here.

RISKY

Not highly valued becasue they mine low-grade (mostly zinc) assets. That said, he recently picked up some of TV-T as bargain-basement shopping and expecting a bounce. There's upside here though with some risk. The balance sheet is good without net debt, but the assets are not the best. It's a trade. If the US-China trade deal happens, all base metals will pop 10-15% in a single day.

WATCH

The further you go down the food chain in a sector, the greater the swings you will have in price. It has a bit of a base in mid-December below $0.38. If it can't get above $0.50 and hold then it has some more work to do.

DON'T BUY

Recently dropped to an all-time low Tax-loss selling probably had an effect. It's probably the bottom now and it's cheap now (like many stocks). But TV won't be the first to rise, because it's so small. Larger competitors will move up sooner and higher. Maybe within this year this will rise, but it depends on demand from China.

COMMENT

It has been a painful year for junior mining stocks. There has been an exodus of capital from the group. It is a pure play on zinc, is a low cost producer and he likes their position. There is no debt and they are building up cash. He thinks a catalyst will be the US$ having peaked and rolling over. The US$ has been a headwind for commodities in the last year.

TOP PICK

All mining sotcks have been decimating. TV are generating cash flow and made some great acqusitions. TV will generate as much cash flow as the entire market cap of the company. It's cheap now. (Analysts’ price target is $1.16)

DON'T BUY

It is a zinc producer. Zinc is nowhere near the price it was expected to be a year ago. This company has disappointed investors and the whole sector is not doing well. They are 0 for 8 in meeting their own forecasts.

RISKY

More of a macro call about zinc. All metals have been weak as we worry about China and U.S. tariffs. Trevali is doing all the right things. There'll be a recovery in metals. A low, speculative buy is probably a good entry point here.

TOP PICK

A pure zinc play. They successfully did debt financing last year. Balance sheet and operations look good. Has met with management twice. They just said that Caribou Mine in New Brunswick will underperform, but their Burkino Faso mine will make up for it. Their numbers will still be good. Price to cash flow at 2x next year. The stock is decimated now, so it's a good time to buy, and could be weak in forthcoming tax-loss selling. (Analysts' price target $1.39)

COMMENT

Down 54% YTD. A pure zinc play. Down because of tariff talks. It's diversified geographically. For this to turn, there needs to be a change in zinc sentiment. Their highest-grade asset is in Burkino-Faso where there is a security risk.

TOP PICK

They will generate as much cash flow at current prices or lower in the next 2.5 years that their entire market cap now. Unless prices collapse, there's little risk. A good operator and exposed to zinc which is undersupplied (no dividend, Analysts' price target: $1.61)

HOLD

He has owned this periodically, especially when production started in Peru and New Brunswick. Now they have diversified further into Africa. It is the largest independent iron producer and the balance sheet is impeccable. He also likes their leverage to zinc. He also worries about the social license of a public company in some of these countries.

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Trevali Mining Corp (TV.TO)