Four warning signs that Teck’s spectacular gains are over – by David Berman (Globe and Mail – August 18, 2017)

Teck Resources Ltd. rewards nimble investors who can move against the current, selling the stock when times are good and buying it when the outlook is dismal. Today, conditions are excellent for the Vancouver-based miner, and that suggests shareholders should consider departing from this roller coaster of an investment.

On the surface, this might not sound like a great idea, given Teck’s stellar second-quarter results, released late last month. Teck, which produces copper, zinc and steelmaking coal from mines in Canada, the United States, Chile and Peru, topped analysts’ estimates with a profit of $577-million or $1 a share – way up from a profit of just 3 cents a share a year ago.

Analysts had been expecting a profit of 90 cents a share, according to Reuters. The company’s debt levels are also falling, which is good. Net debt per share declined to $9.59, according to a report from Canaccord Genuity, down from $13.42 a share last year, which is a steeper drop than analysts had been expecting.

The improvements follow strong base metals prices. Zinc has risen to its highest level in nearly a decade and the price of copper is near a three-year high, reflecting stronger global economic growth and limited supplies.

The London Metal Exchange Index is up nearly 18 per cent this year alone. Teck’s share price has been riding this good news. From its recent low near the start of 2016, when the London Metal Exchange began what would blossom into a rally of more than 50 per cent, Teck’s share price has surged a remarkable 665 per cent.

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