8 Best Rare Earth Stocks and ETFs

2. Teck Resources Limited (NYSE:TECK)

Number of Hedge Fund Holders: 60

Teck Resources Limited (NYSE:TECK), a Canadian diversified mining company founded in 1913, engages in the exploration and production of natural resources across continents.

The company primarily focuses on steelmaking coal, copper, zinc, and energy. In addition to its main commodities, Teck Resources Limited (NYSE:TECK) also produces lead, silver, molybdenum, and various other metals, chemicals, and fertilizers. The company is also involved in gold exploration.

Teck Resources Limited (NYSE:TECK)’s Q1 2024 earnings call revealed that the adjusted EBITDA came in at $1.7 billion, driven by strong steelmaking coal and copper prices. Copper sales volumes increased, and steelmaking coal prices remained high compared to the same period last year. Revenue reached $3.98 billion, up 5.36% from Q1 2023.

Analysts have a positive outlook for Teck Resources Limited (NYSE:TECK), with an average 12-month price target of $57.3. This represents a potential upside of over 20% from the current price levels. Price forecasts range from a low of $51.63 to a high of $66.9. Furthermore, 11 out of 12 analysts have rated the stock as a “Buy.”

Here’s what Greenlight Capital said about Teck Resources Limited (NYSE:TECK) in its Q1 2024 investor letter:

“Finally, we established a medium-sized macro position to benefit from higher copper prices. Long-time partners may recall that in 2021 we presented Teck Resources Limited (NYSE:TECK) at the Sohn Investment Conference. At the time, our thesis was based on a combination of being bullish on copper and believing that TECK was about to exit the penalty box after a multi-year investment in a new copper mine that was on the brink of finally coming online. Back then, TECK traded at C$31.09. Based on copper at $4.50 a pound, we thought the stock was undervalued by half. It has since doubled (and dramatically outperformed copper peer Freeport-McMoRan) and, over time, we have reduced the position into strength.

As we showed on this slide from our 2021 presentation, our thesis was that after several new mines, including TECK’s, there would not be new supply available in the second half of this decade.

Time has passed, the new mines have come online and the anticipated gap between supply and demand is likely to open up in the next year. While we still believe TECK is undervalued should copper prices rise, it is less undervalued than it once was. Our thesis now is that copper supply is about to fall short of demand, forcing prices substantially higher. Once again, we think the best way to invest in that thesis is the most direct way – in this case through options on copper futures.”