Update Thompson Creek Metals (TC)

Thompson Creek Metals (TC) announced earnings of 15 cents a share for the fourth quarter last night (February 25) after the market close. Revenue for the quarter came to $106 million. Both beat Wall Street projections for 8 cents a share in earnings and $94 million in revenue.

Those numbers represent a 42% decline in revenue from the fourth quarter of 2008 and an 86% drop from earnings per share of 56 cents in that same quarter. These numbers are Thompson Creek’s first financial report under U.S. accounting rules (required since more than 50% of the shares of the Canadian company are now owned by U.S. citizens.)  If the company were still reporting under Canadian accounting rules earnings per share for the fourth quarter would have been 17 cents.

In its guidance the company said that it continues to see signs of recovering demand for molybdenum in 2010. The company’s mines are currently operating at full capacity and it expects molybdenum production in 2010 to reach a record 29 to 32 million pounds. Cash costs are expected to remain low in a range of $6 to $7 a pound.

Now there’s just the question of price of molybdenum. Read more

Want banks? Have you looked north, lately?

Looking for another way to invest the Canadian Loonie, which I called the world’s greatest currency, in my August 6 post? (See “The world’s greatest currency? The Canadian Loonie gets my vote. And soon some of my money” http://jubakpicks.com/2009/08/06/the-worlds-greatest-currency-canadas-loonie-gets-my-vote-and-soon-some-of-my-money/ )

It’s time to take a serious look at Canada’s banks. Their balance sheets are stronger; the Canadian housing market is closer to a turn-around than that in the United States; and with Canadian regulations keeping non-Canadian competition in the country’s banking sector to a minimum, they’ve free to use their home profits to expand into the much  bigger U.S. market.

My favorite among the Canadian banks is Toronto Dominion (TD) because it’s furthest along in its penetration of the U.S. market. That meant it took more of a beating when the U.S. banking market fell into near collapse but it also means the stock has, in my opinion, the most upside.

But you can make a case for most of the big Canadian banks after they announced quarterly earnings on August 27. Read more

Building a Loonie portfolio: 8 Canadian stocks, that is.

Want to give yourself some exposure to Canada’s commodities, Canada’s economy, and Canada’s currency,the Loonie? (See my 8:30 a.m. post today for the reasons that makes sense.)

Here’s a quick eight stock portfolio to buy when the time is right. (I think you’ll get a buying opportunity within the next six months–or much, much less.)

You could do worse than to buy shares of the iShares MSCI Canada Index (EWC). With one buy you’ll pick up three of the stocks in my eight stock portfolio: Toronto Dominion Bank (TD), natural gas producer EnCana (ECA),  and fertilizer giant Potash of Saskatchewan (POT).  The last two of those are both members of my Jubak Picks 50 long term portfolio.

With the ETF (exchange traded fund) buy you’ll also get exposure to Suncor Energy (SU), Royal Bank of Canada (RY), and Barrick Gold (ABX). Nothing wrong with those picks but if you’re building a portfolio stock-by-stock, I think you can do better. Read more

The world’s greatest currency? Canada’s Loonie gets my vote. And soon some of my money.

Not the yen, or the euro or the reminbi. Sure as shootin’ not the U.S. Dollar or the pound.

Yep, it’s the Loonie, Canada’s dollar with the ghostly-voiced diving bird on it, that gets my vote as the world’s greatest currency. And not just at the moment either. This is the currency I most want to own for the next decade.

Right now, all the currencies of the global commodity producers are in rally mode. The Australian and New Zealand dollars, the Norwegian krone, and the Canadian Loonie have all hit 11-month highs against the U.S. dollar this week.

You don’t exactly have to be Mycroft Holmes to figure out why. With a belief that China has gone on a sustainable commodity buying spree to support its economic recovery, commodity prices have soared and so have the stock markets and currencies of countries with commodity-based economies.

 The iShares MSCI Canada Index (EWC) is up 80 from its March 9 low through the close on August 5–the U.S. Standard & Poor’s 500 Stock Index is up 48% in that period–and the Canadian dollar is up 21% against the U.S. dollar during the same time.

I’d put the Canadian Loonie and Canadian stocks ahead of the currencies and stocks of other commodity-based countries because Canada’s commodity basket is the most diversified in the world. (Well, Brazil will give Canada a run for the money on that standard if the South Atlantic oil discoveries pan out.) Canada has Norway’s oil, and Australia’s mines and farms, and New Zealand’s timber and farms all in one package.

And Canada’s Loonie is better positioned in the interest rate cycle. High domestic interest rates–as long as they’re not so high that they signal some major economic dysfunction–add strength to a currency. Part of the strength of the Australian and New Zealand dollars, for example, results from the high 3% and 2.5% interest rates, respectively, set by the central banks of those countries. Money flows into Australia and New Zealand as investors look for those higher yields and that pushes up demand for those currencies (since to get the yield you have to buy something denominated in the local currency.) Read more

Update Thompson Creek Metals Raising target price again

Once again time to ask, Time to sell Thompson Creek Metals (TC)? I still don’t think so. It’s absolutely true that the commodities rally of has taken shares of this molybdenum miner way above my old Jubak Picks target price of $7 a share by December 2009. And it’s almost likely that the current rally is due for a correction at the least, which would probably see Thompson Creek and all other commodity stocks give back at 33% of the gain since the March 9 bottom. But I think this stock has more room to run in 2009 and it’s worth holding the shares through any correction. Read more