Teck Resources Ltd. Tops $30: Are More Gains on the Way?

Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) continues to soar. Is this the right time to buy?

| More on:
coal-fired power plant, utility

Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) is up 50% in the past two months and comfortably back in positive territory for the year.

Let’s take a look at Canada’s largest diversified mining company to see if this is the right time to buy.

Commodity rally

Teck produces metallurgical coal, copper, and zinc.

The markets for these products were in multi-year slumps leading into 2016, but all three rallied last year, sending Teck’s stock from a low of $4 per share to above $35 last November.

The party took a break through the first part of 2017, and Teck’s stock pulled back to $20, but a renewed surge in the commodity markets has investors wondering where we are headed next.

What’s going on?

Copper is riding a wave of optimism on global demand and getting an additional boost from production setbacks at some of the planet’s largest mines.

The supply issues will likely get sorted out in the near term, but a weak U.S. dollar and improving sentiment on demand in major markets, including China, could keep the rally going.

Zinc is trading at levels not seen in a decade, as years of production cuts are finally hitting supply amid rising global demand.

Metallurgical coal is still down significantly from the highs it hit last November, but prices have firmed up after a big pullback earlier this year.

What about oil?

Teck is a 20% partner on the Fort Hills oil sands development, which is scheduled to begin production later this year.

That’s good news for Teck’s capital expenditures, which have been high in recent years due to the mine’s heavy development costs, but some pundits are concerned Fort Hills won’t be profitable unless oil prices improve.

Should you buy?

Teck’s debt load is now under control, and the company is positioned well to benefit from rising prices in its core markets.

Investors who can handle the volatile moves and like the commodity story over the medium term might want to start a small position on the next pullback, but I wouldn’t chase the latest rally today.

Copper and zinc have had huge runs in a very short period of time, and they are due to take another break.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Walker has no position in Teck Resources.

More on Metals and Mining Stocks

construction workers talk on the job site
Metals and Mining Stocks

2 No-Brainer Mining Stocks to Buy With $200 Right Now

You can buy these top Canadian mining stocks with just a $200 investment right now to start your long-term wealth…

Read more »

Concept of multiple streams of income
Stocks for Beginners

Lock Up This 9.2% Dividend Yield From a Top Royalty Stock

Royalty stocks have a strong advantage when it comes to creating passive income for investors. But this one has the…

Read more »

Safety helmets and gloves hang from a rack on a mining site.
Metals and Mining Stocks

Is First Quantum Minerals Stock a Good Buy Right Now?

First Quantum is a TSX stock that trades 61% below all-time highs. However, the mining stock still trades at a…

Read more »

nugget gold
Metals and Mining Stocks

The Best Gold Stock to Invest $1,000 in Right Now

Here are two of the best Canadian gold stocks that can yield some eye-popping returns in the long run.

Read more »

nugget gold
Stocks for Beginners

The Ultimate Mining Stock to Buy With $1,000 Right Now

This mining stock just saw a drop, but don't let that keep you from diving in. This miner is due…

Read more »

A plant grows from coins.
Metals and Mining Stocks

Canadian Mining Stocks: Buy, Sell, or Hold?

Explore 2025’s top Canadian mining stocks – gold, uranium, and base metals offer big potential in a dynamic, commodity-driven market.

Read more »

farmer holds box of leafy greens
Metals and Mining Stocks

3 Reasons to Buy Nutrien Stock Like There’s No Tomorrow

Nutrien stock has lost 34% of its value just this year alone and looks incredibly cheap today. Yet, secular trends…

Read more »

Canada national flag waving in wind on clear day
Tech Stocks

Trump Trade: Canadian Stocks to Watch

With Trump returning to the presidency, there are some sectors that could boom in Canada, and others to watch. But…

Read more »