teck resources

Westshore Terminals Investment Corp., $34.34, symbol WTE on Toronto (Shares outstanding: 74.3 million; Market cap: $2.6 billion; www.westshore.com), owns a coal storage and loading terminal at Roberts Bank, B.C., about 30 kilometres south of Vancouver. The terminal started up in 1970. Teck Resources accounts for 56% of the terminal’s volume, and other Canadian coal producers supply 12%. The remaining 32% comes from U.S. customers. Producers ship their coal to the terminal by rail. Westshore then loads it onto ships that deliver it to customers in over 20 countries. The company does not purchase the coal. Instead, it receives a handling fee for loading it....

BOMBARDIER INC., Toronto symbols BBD.A $3.77 and BBD.B, $3.71, reported better-than-expected quarterly results this week. Without costs related to its recent restructuring, which included laying off 2% of its workforce, Bombardier’s earnings rose 34.5% in the quarter ended September 30, 2014, to $222 million, or $0.12 a share (all amounts except share prices in U.S. dollars). That beat the consensus estimate of $0.10 a share. A year earlier, the company earned $165 million, or $0.09 a share. Overall revenue gained 20.9%, $4.9 billion from $4.1 billion, also beating the consensus forecast of $4.82 billion....

TECK RESOURCES LTD. $19 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 566.8 million; Market cap: $10.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 4.7%; TSINetwork Rating: Average; www.teck.com) has dropped 25% in the past three months, mainly due to the U.S. dollar’s recent rise and slowing economic growth in China and other parts of Asia. These factors have depressed the prices of metallurgical coal (which supplies 42% of Teck’s revenue) and copper (32%).

However, the company continues to benefit from rising zinc prices (26%). Thanks to better-than-expected production at its Red Dog mine in Alaska, Teck expects to produce 600,000 to 615,000 tonnes of zinc in 2014, up from its original forecast of 555,000 to 585,000. The company also plans to reopen its Pend Oreille zinc mine in Washington State by the end of 2014.

Meanwhile, Teck continues to aggressively cut its operating costs. It lowered its annual expenses by $360 million in 2013 and should achieve additional savings of $180 million a year by the end of 2014. The company has also reduced this year’s spending on new projects and upgrades by $150 million.

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CANADIAN TIRE CORP., $120.92, Toronto symbol CTC.A, hit a new all-time high of $121.66 this week after announcing a new three-year growth plan. The company’s strategy mainly involves building new stores, upgrading existing ones and expanding its e-commerce businesses. It will spend $575 million a year on these initiatives from 2015 to 2017. To put that in context, Canadian Tire earned $169.9 million, or $2.12 a share, in the quarter ended June 28, 2014. The company feels these improvements will increase annual sales by 3% at its Canadian Tire stores, 5% at the Mark’s casual clothing chain and 9% at its sporting goods stores, including Sport Chek. It also expects its earnings per share to rise 8% to 10% each year over the next three years....

TECK RESOURCES LTD. $19 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 566.8 million; Market cap: $10.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 4.7%; TSINetwork Rating: Average; www.teck.com) has dropped 25% in the past three months, mainly due to the U.S. dollar’s recent rise and slowing economic growth in China and other parts of Asia. These factors have depressed the prices of metallurgical coal (which supplies 42% of Teck’s revenue) and copper (32%). However, the company continues to benefit from rising zinc prices (26%). Thanks to better-than-expected production at its Red Dog mine in Alaska, Teck expects to produce 600,000 to 615,000 tonnes of zinc in 2014, up from its original forecast of 555,000 to 585,000. The company also plans to reopen its Pend Oreille zinc mine in Washington State by the end of 2014. Meanwhile, Teck continues to aggressively cut its operating costs. It lowered its annual expenses by $360 million in 2013 and should achieve additional savings of $180 million a year by the end of 2014. The company has also reduced this year’s spending on new projects and upgrades by $150 million....

TECK RESOURCES LTD. $25 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 576.2 million; Market cap: $14.4 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.6%; TSINetwork Rating: Average; www.teck.com) is a leading producer of metallurgical coal, a key ingredient in steelmaking. Its six coal mines (five in B.C. and one in Alberta) have lifespans from six to 70 years.

The company sells most of its coal to customers in Asia. In 2013, coal accounted for 43% of Teck’s revenue and 41% of its earnings.

Teck also produces copper (30%, 41%), which manufacturers use to make electrical wire, auto parts and components for electronic devices. As well, Teck is a major supplier of zinc (27%, 18%), which prevents rusting when added to steel.

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TECK RESOURCES LTD. $25 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 576.2 million; Market cap: $14.4 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.6%; TSINetwork Rating: Average; www.teck.com) is a leading producer of metallurgical coal, a key ingredient in steelmaking. Its six coal mines (five in B.C. and one in Alberta) have lifespans from six to 70 years. The company sells most of its coal to customers in Asia. In 2013, coal accounted for 43% of Teck’s revenue and 41% of its earnings. Teck also produces copper (30%, 41%), which manufacturers use to make electrical wire, auto parts and components for electronic devices. As well, Teck is a major supplier of zinc (27%, 18%), which prevents rusting when added to steel....

BCE INC., $49.32, Toronto symbol BCE, has agreed to buy the 56% of BELL ALIANT INC., $30.93, Toronto symbol BA, that it doesn’t already own. Bell Aliant sells phone and Internet services to 2.3 million customers in Atlantic Canada and rural Ontario and Quebec. It also provides wireless services through an alliance with BCE. Bell Aliant shareholders will have three options when they tender their shares: $31.00 in cash; 0.6371 of a BCE common share; or $7.75 in cash plus 0.4778 of a BCE share. Investors can defer capital gains taxes on the BCE shares they receive until they sell....

TECK RESOURCES LTD. $24 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 566.9 million; Market cap: $13.6 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.8%; TSINetwork Rating: Average; www.teck.com) has decided against building a pipeline that would pump treated waste water from its Red Dog open-pit zinc mine in northern Alaska to the Arctic Ocean. Under an agreement with environmental regulators, Teck spent $1.7 million studying the line. However, seasonal freezing and thawing would likely damage it if it ran underground. Teck also concluded that an above-ground line, which would have cost $261 million U.S., was not viable. Instead, Teck will keep processing waste water at the mine and releasing it into the local creek. The decision to not build a pipeline also means it has to pay an $8-million U.S. fine. That’s equal to 8% of Teck’s 2014 first quarter earnings of $105 million (Canadian), or $0.18 a share....

p>SUNCOR ENERGY INC. $43 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $64.5 billion; Price-to-sales ratio: 1.5; Dividend yield: 2.1%; TSINetwork Rating: Average; www.suncor.com) is Canada’s largest integrated oil company by market cap (or the value of all its outstanding shares). Suncor gets 40% of its revenue and 65% of its earnings from producing crude oil and natural gas. Its 7.7 billion barrels of proven and probable reserves should last 35 years, based on current production rates.

The oil sands account for 70% of the company’s output. It also operates offshore platforms in Atlantic Canada and the North Sea, as well as conventional wells in Libya. However, political unrest has shut down some of Libya’s ports, limiting Suncor’s crude exports from the country.

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