Monday, April 27, 2009

Teck Resources Ltd

I am reviewing this stock (TSX-TCK.B) as I received the annual report on this stock. I had bought 100 shares because the price got so low. When it moves up a bit more, I will sell. I know that there is a bear market and a recession, but one must also have some fun. (Note that this company used to be Teck Cominco Ltd until this month when the name was changed.)

If you look at the growth figures to the annual statement, then Revenue, Earnings, Book Value and Cash Flow all have very strong growth. What got this company in trouble is their short term debt. They bought Fording Coal at the wrong time. For every move they make to improve their balance sheet situation, the price for this stock has gone up. They have also stopped their dividend payments.

Since I last updated my spreadsheet on April 11th, 2009 for the annual report, the earnings expected for 2009 has gone down slightly and the earnings expected for 2010 have gone up slightly. I am just catching up in my blog for all the annual statement updates I have been making lately. Unfortunately, most of the financial statements come at the same time, so it takes time to process them and update my blog.

The Return on Equity (ROE) was low at 6% and quite a bit below the recent ROEs. The Accrual Ratio is high, but when you consider the Financial Cash Flow, the Accruals become negative. I do not usually buy resource stocks or I buy them for a short period of time. I know that the TSX has lots of resource stocks, but I personally find them too risky for a long term investment. I only bought into this one because the price when far lower than I thought it should for the problems they have.

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 on this company at

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.

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