Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, diversified mining company Teck Cominco (NYSE: TCK) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks have woefully lagged the market average.
With that in mind, let's take a closer look at Teck's business and see what CAPS investors are saying about the stock right now.
Teck Cominco facts
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Headquarters
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Vancouver, Canada
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Market Cap
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$1.62 Billion
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Industry
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Industrial Metals and Minerals
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Trailing-12-Month Revenue
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$6.4 Billion
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Management
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CEO Donald Lindsay (Since 2005)
CFO Ronald Millos (Since 2005)
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Return on Equity (Average, Past Three Years)
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31%
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Dividend Yield
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27.30%
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Competitors
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Freeport-McMoRan Copper & Gold (NYSE: FCX)
Southern Copper (NYSE: PCU)
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CAPS Members Bullish on TCK Also Bullish on:
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Vale (NYSE: RIO)
Transocean (NYSE: RIG)
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CAPS Members Bearish on TCK Also Bearish on:
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First Solar (Nasdaq: FSLR)
Ford Motor (NYSE: F)
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 762 of the 775 members who have rated Teck Cominco -- some 98% -- believe the stock will outperform the S&P 500 going forward. These bulls include foolingwithmoney and Foolish mining guru Christopher Barker, a.k.a. TMFSinchiruna.
Two days ago, foolingwithmoney noted that Teck "has been hit with panic selling harder [than anyone else, and its] current value is based upon speculation that it could declare bankruptcy." Our CAPS member continued: "There are many stocks that have been oversold on panic and this is a prime example due to the Fording deal timing."
In a pitch just five days earlier, TMFSinchiruna explained the Fording situation in greater detail and broke down the past several months for our community:
[C]ertainly felt safe picking [Teck Cominco] to outperform from a cost basis of around $33 back in September. After all, the company was nearing completion on its purchase of Fording Canadian Coal Trust to consolidate ownership of the massive and incredibly lucrative Elk Valley coal project in Canada.
With [metallurgical] coal prices still trading at lofty levels and contracts not due to reset until April 2009, I blessed Teck's purchase of Fording because if the massive profit potential of the project. ...
After the credit crunch devolved into the credit train wreck over subsequent weeks, analysts and investors grew increasingly concerned about Teck's ability to repay the debt incurred with the purchase. ...
That's where we are today (Nov 2008). If the company manages to make payments as it has indicated it will, then what we will have here is one of the more substantially undervalued commodity players out there. If base metal prices remain here in the doldrums, though, then Teck could conceivably fold, which is why shares are languishing near $5. If base metal prices find support on the heels of any meaningful catalyst, I would view that as an opportunity to take a close look at Teck.
What do you think about Teck Cominco, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so get started.
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