Update Thompson Creek Metals (TC)
Today Thompson Creek Metals (TC) confirmed what the market had long expected: that when the company reports its fiscal 2009 financial results in February, it will switch to U.S. GAAP from Canadian accounting rules. The big impact will be that the company has to mark its outstanding 24 million warrants to fair value each quarter and take a one-time charge or credit to adjust them to that fair market price.
The result for fiscal 2009 will be a pre-tax, non-cash charge of about $93 million. The charge will be large enough, the company said, to turn net income for fiscal 2009 negative.
The change should have no effect on the price of the shares (no matter whether it should or not) since Wall Street analysts and institutional investors have 1) known this change was coming for months and 2) normally look past this kind of non-cash accounting charge anyway.
More significant is the price of molybdenum, which had rallied by about 25% in the four weeks through January 22 to reach nearly $15 a pound from $12 in mid-December. (Prices have retreated a bit since then on worries about when the Chinese government would slow the country’s economy.)
The big questions for Thompson Creek Investors—and the stock is in my Jubak’s Picks, Jubak Picks 50, and personal portfolios—is why the price jump and where the price of molybdenum might be headed. Read more
Update Thompson Creek Metals (TC)
On November 5 Thompson Creek Metals (TC) reported third quarter earnings of 14 cents a share, 3 cents a share above the Wall Street consensus, and revenue of $114 million, well above analyst projections of $90 million. The upside came from lower costs at just $5.67 per pound of molybdenum and from higher sales volumes, up 17% from the second quarter although still down 12% from the third quarter of 2008. Molybdenum prices remained depressed at $12.75 a pound, down a huge 61% from the third quarter of 2008.
The best news, though, wasn’t in the numbers for the third quarter but in the company’s guidance for 2009 and 2010. 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
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
