May 25, 2023
Top 10 Stock Teck Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Teck – Top 10 Stock in Copper Mining and Production
Teck is listed as a top 10 stock on May 25, 2023 in the market index Copper because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 65 (high 65% performer), Obermatt assesses an overall buy recommendation for Teck on May 25, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Diversified Metals & Mining |
| Index | Low Emissions, Copper, Human Rights, Low Waste, Zinc, Water Efficiency, TSX Composite |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment Teck Buy
| 360 METRICS | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 72 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 54 |
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| SENTIMENT | ||||||||
| SENTIMENT | 86 |
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| 360° VIEW | ||||||||
| 360° VIEW | 65 |
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ANALYSIS: With an Obermatt 360° View of 65 (better than 65% compared with alternatives), overall professional sentiment and engagement for the stock Teck are above average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Teck. The consolidated Value Rank has an attractive rank of 72, which means that the share price of Teck is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 72% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 54. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 86. But the consolidated Growth Rank has a low rank of 13, which means that the company is below average in terms of growth, and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 87 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 65, Teck is better than 65% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 72), secure financing practices (Safety Rank of 54), and positive market sentiment in the professional investor community (Sentiment Rank of 86). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company growth expectations are below the industry average (Growth Rank of 13), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good value ranking can sometimes indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Teck is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Teck very positive
ANALYSIS: With an Obermatt Sentiment Rank of 86 (better than 86% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Teck is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Teck. Analyst Opinions are at a rank of 85 (better than 85% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 78, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Teck. The Professional Investors rank is 88, which means that currently, professional investors hold more stock in this company than in 88% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 54 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 54% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 86 (more positive than 86% compared with investment alternatives), Teck has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Teck stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Teck Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 72 (better than 72% compared with alternatives), Teck shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Teck. Price-to-Sales (P/S) is 52, which means that the stock price compared with what market professionals expect for future sales is lower than for 52% of comparable companies, indicating a good value regarding Teck's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 86% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 73. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 45% of all competitors have even lower dividend yields than Teck (an Dividend Yield Rank of 45). 55% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 72, is a BUY recommendation based on Teck's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Teck Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 13 (better than 13% compared with alternatives), Teck shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Teck. Sales Growth has a below market rank of 39, which means that, currently, professionals expect the company to grow less than 61% of its competitors. The same is valid for Capital Growth, with a rank of 15, and Profit Growth, with a rank of 20. Currently, professionals expect the company to grow its profits less than 80% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 59, which means that the stock returns have recently been above 59% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 13, is a SELL recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Teck, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with an above-market return. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive shareholder returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Teck Debt Financing Safety above-average
| SAFETY METRICS | May 25, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 34 |
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| REFINANCING | ||||||||
| REFINANCING | 25 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 94 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 54 |
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ANALYSIS: With an Obermatt Safety Rank of 54 (better than 54% compared with alternatives), the company Teck has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Teck is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Teck. Liquidity is at 94, meaning the company generates more profit to service its debt than 94% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 25, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 75% of its competitors. Leverage is also high at a rank of 34, which means that the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 54 (better than 54% compared with alternatives), Teck has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usuallyl indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Teck Below-Average Financial Performance
| COMBINED PERFORMANCE | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 72 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 94 |
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| COMBINED | ||||||||
| COMBINED | 28 |
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ANALYSIS: With an Obermatt Combined Rank of 28 (worse than 72% compared with investment alternatives), Teck (Diversified Metals & Mining, Canada) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Teck are a good value (attractively priced) with a consolidated Obermatt Value Rank of 72 (better than 72% of alternatives), are safely financed (Safety Rank of 54, which means low debt burdens), but show below-average growth (Growth Rank of 13). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 28, is a hold recommendation based on Teck's financial characteristics. As the company Teck's key financial metrics exhibit good value (Obermatt Value Rank of 72) but low growth (Obermatt Growth Rank of 13) while being safely financed (Obermatt Safety Rank of 54), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 72% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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