The greatest outperforming stock of this impressive tech rally is decidedly low-tech.
Technology stocks have been on an absolute tear, with the Nasdaq surging on the strength of earnings from leaders like Apple
Meet the new Teck Resources
When a series of crafty moves began to dampen concerns about the company's sizeable debt load back in March, Teck Resources shares launched into the broader equity rally with the fuel of a cleaner balance sheet, and in less than five months, they have increased ninefold from the March low of $2.61. Reporting adjusted net earnings for the second quarter of $213 million, the company now reminds us that profitability for this once and future mining giant was never really in question.
Teck mines primarily copper and coking coal (used in steel furnaces), plus a fair volume of zinc. Copper prices remain well below their 2008 highs, but resurgent demand from China has boosted miners like Freeport-McMoRan Copper & Gold
China's appetite for coking coal has absorbed much of Teck's reduced shipments to U.S. and European markets, and now has the company reversing some prior production cuts. With several mines in British Columbia, Teck is far better positioned geographically to redirect production to China than Appalachian miners like Massey Energy
Thanks in part to a strategic investment from China's sovereign wealth fund, Teck Resources has chipped that daunting debt down to $8.9 billion, and a large note issuance bought the company some valuable time. Though the debt remains a heavy burden to carry, the Teck rally may yet outshine the tech rally.
- Teck rebranded itself for a clean slate.
- Skyrockets in flight, speculators' delight.
- Teck fell further than the banks.