Teck Resources: Zinc Will Be a Key Driver for 2011

Proactive Investor submits: How Teck Resources (NYSE: TCK) has turned its fortunes around.

Lower coal prices took a big bite out of fourth quarter earnings at Teck Resources Ltd., but the numbers still came in well above expectations. Canada’s largest diversified miner reported adjusted earnings of $354-million, or $0.61 a share. That was down 54% from the $1.04 per share that Teck earned in the fourth quarter of 2011, but topped the consensus analyst estimate of $0.48 a share.

LONDON – Following a half-decade-long boom in demand from China, the price of iron ore dropped sharply in 2012. While it bounced back a bit toward the end of the year, the price remains far below its February 2011 peak, and analysts say it is unlikely to return to those heights in the foreseeable future.   The price of iron ore, the raw material used to make steel, is a bellwether for manufacturing and construction and its price fluctuations, much like the price of crude, reflect the health of the global economy.  

Kevin Barker submits: Last year I said Teck Resources (NYSE: TCK, TSX) would get a lot bigger or a lot smaller owing to the spectacular debt it was carrying. It did neither.

When Teck Resources Ltd. holds its quarterly earnings conference calls, chief executive Don Lindsay is always asked about acquisition opportunities. His usual response is that Teck is looking, but price tags are too high. That changed on Thursday’s call. He acknowledged that values have come down in recent months and more assets have come available. That includes projects in the iron ore sector, an industry that Teck has been eager to break into for years.

Vancouver, Canada-based Teck Resources (NYSE: TCK) is a diversified miner with exposure to three main markets: metallurgical (or "met") coal, copper and zinc.

Apple stock has tanked 35% from its all-time high, and now sits at $450. If things go badly for Apple over the next several years, the stock could fall a lot farther from here. But if things go even moderately well, the stock should deliver a compelling return. Why? Because, at $450, the stock looks cheap. At $450, Apple stock is trading at 10X trailing earnings per share.

David Urban submits: Note: C$’s stand for Canadian dollars, which is the reporting currency by Teck (TCK) and this is the first quarter where earnings are reported using IFRS rather than Canadian GAAP. Teck Resources had a difficult first quarter of 2011 to say the least. Strikes and Mother Nature caused production and sales delays but through it all Teck delivered solid numbers.