Trevali Mining Corp (TV.TO)

Metal prices are up but mining stocks are not tracking that. There is a disconnect that he does not get. This is a pure play and there is nothing wrong with the company. But zinc prices are coming down. This caught the market by surprise. There is not a lot of supply in zinc coming on. There are not a lot of mines under construction right now. He does not think zinc is going to collapse. He thinks it is a great name.

He would not take a position in this stock because it’s price is lower than $2.50. Looking at the chart, you can see a transformation in the company from mid-2015 to mid-2016, that the company has come through well. More recently, there has been some movement, the stock price average is moving higher. The stock looks like it has the potential to move to $1.70 or 1.80 over the next 6 months. He would buy no more than 1% of his portfolio. Volume looks fairly consistent. If the stock drops, manage your sell price for a 20-cent loss at $1.28.

He continues to like the name. It has been a frustrating trade. They did a big deal, acquiring some big mines in west Africa. It is the largest non-senior producer of Zinc in the world.

It'll go higher. The zinc business is in good shape. A go-to zinc stock that should perform well.

Several analysts cover this stock. Eight have published earnings estimates: that earnings will be 8 cents in 2017 and will triple the next year. The stock trades at only a 6.6x P/E multiple, forecast ROE is 23% and it has a free cash flow of 4.1%. Rising inflation will be positive for this company and global economic growth will benefit them as well. This is one of the few pure-play zinc companies and they are finding more resource in Eastern Canada. (Analysts’ price target is 2.13$)

He continues to like base metals in general, particularly zinc. This is a pure play. He is expecting the price of zinc, as significant as the increase has been in the past 12 months, to still have much more upside. The stock is expected to earn $.27 in 2018, so the $1.55 for the stock is a pretty attractive number. They continue to have success with the drill bit.

About 5 years ago, demand for zinc was relatively stable and then mine supply rolled off. Also, zinc is a by-product of a copper mine quite often. Global mine supply is tricky. This company is almost a pure play. You want to buy when everybody hates them, but with the current situation, he is less than enthusiastic now. This has done relatively well, but it is still not a big enough market cap for him.

One of those resource themes he is starting to look at. Has it in his growth portfolio. Probably the purest play in zinc in the Canadian market. Very, very highly leveraged towards the metal. The balance sheet isn't too bad. As we get global synchronized growth, there is no real reason why this can't continue to do well. There is one caveat. There is some production coming back on stream and metals are cyclical, so you have to keep an eye on how much production is coming on, versus what the economic demand is.

Zinc inventories have gone through the pinch point. This is at the top of his list of precious metals. It is a pure play.

A pure zinc play. He has an optimistic outlook for zinc. It takes about 3 years to bring a new zinc mine into production, and there is not a lot of new zinc on the horizon. Zinc has moved up significantly, almost doubled to about $1.40 per pound.

This is becoming a brand name for junior zincs. He doesn’t own it, because it seems like a collection of small assets. Thinks that its market presence in Canada and that it is in the zinc space, the stock will trade well. Probably a good name if you like the zinc trade and you want to be in the junior space.

He tries not to forecast commodities. There will be some tightness of supply in zinc. Global growth looks okay. It looks good for zinc. If things go right in the metal then the stock will do well.

Small-cap zinc company with properties in eastern Canada and doing quite well. It hit recent highs, almost doubling in the last 12 months. Demand for zinc is going up, and supply is limited. China has a big push on to try and reduce the amount of pollution, and as a result, some of their mines have been put out of business. You could also consider Americas Silver (USA-T) which has by products of zinc and lead. He is keen on the space.

Seasonally, we are entering a period that is strong for metal and mining stocks. This is the time of year when copper tends to move higher, more so in November and December and the 1^st quarter of the year. Production tends to do tremendously well in the 1^st quarter, and even into the 1^st half. Technically it is holding above its 200-day moving average, and hitting resistance at $1.60. Momentum is still positive, so he suspects it will continue bumping up against that. Once you have the breakout above $1.60, you should see significant highs ahead. (See Top Picks.)

It has done well. This is the pure play. He bought it in a smaller fund of his. He likes it but it will be quite volatile. This is the one way to play zinc.