Thursday, November 20, 2008

Teck Cominco Ltd 2

When I looked at the price of this stock today, the first thing I thought was – this is stupid. The stock has dropped over 16% today. There was a cluster of insider sells on this stock when it reached $50 in May, but in November, there is a big cluster of insider buying. No wonder there is insider buying at these prices. I just got home from lunch; I had not realized what was going on. The insider buying is occurring in the public market, it is not connected with stock options.

From looking at analyst reports, I see that this company is expected to earn more this year than last, but the earnings have been down graded recently. Analysts seem to either have Strong Buy ratings on this stock or Hold ratings, and this would average out to a Buy rating. There are analysts that are very negative on this stock. Many feel that it will have to sell assets to repay the loan it made to buy Fording Canadian Coal Trust. This is a very bad time for anyone to need credit, since the current financial problems is basically a credit freeze-up.

The one thing that concerns me is the high Accrual Ratio of 7.92%, which is lower than it was at December 2007, which was some 28%, but it still is very high, as anything over 5% is high. Looking at the charts, this stock, because of the recent drop, has done worse than the TSX and the TSX Materials Index for any period, from year to date to 20 years. This stock is part of the TSX Materials Index. It is very obvious that the mob that is investors today, are very concerned about this stock.

Teck is a diversified resource company involved in mining and mineral development with major business units focused on copper, metallurgical coal, zinc, gold and energy. This company has interests in several oil sands developments. The company explores for resources in the Americas, the Asia Pacific Region, Europe and Africa. Its web site is See my spreadsheet at I have reloaded my spreadsheet with the values from the 3rd quarterly report of September 2008.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on my web site.

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