Teck Resources Limited (USA) (NYSE:TCK)
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Mining and mineral development company Teck Resources focuses on copper, metallurgical coal, zinc, and energy.
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Mining and mineral development company Teck Resources focuses on copper, metallurgical coal, zinc, and energy.
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The new coal pricing, which should come in around $300 hasn't been taken into account, add to that the solid copper prices. Also, remove the hangover from the labour issues, and I think $65.00 is quite reasonable in 12 months time.
Okay so maybe I was a little overzealous with my price target. But I really like it at this price. It's a coal play that is always trading on the price of copper. I say back the truck up at under $40. I like buying this and selling some mid to long-dated covered calls, you can easily work out a 10% yield by giving up some upside potential. I think it's a good long-term hold, keep rolling over your covered calls at a price higher than you bought it and wait for it to get called away, or just keep collecting the call yield. Ex. Buy it today at $38.44, and sell the Jan 2013 $45 calls for $3.40. With the dividend and calls you're yielding over 10% if the price goes nowhere. If it skyrockets before January, you're stuck with only a paltry 27% annual return. If it drops, you've got 10% downside protection. Obviously a gross oversimplification, but interesting.