It’s Time To Buy Low…

It’s perfectly understandable that people are scared right now. It’s a frightening market. But there’s one obvious benefit.  All we have to do is remember the golden rule of investing.

Buy low and sell high.

Despite the negative news, this is a value feeding frenzy.  Companies by the bucketful are hitting 52-week lows.  While that’s bad news for current owners, if you’re looking to scoop up great companies on the cheap, now’s the time.

Here’s one to take a look at.

 

QUICK FACTS

Ticker                                      TC

Industry                                    Industrial Metals & Minerals

Recent Price                             $7.62

Market Cap                               $1.2 B

Shares Outstanding                   167.9 m

Average Volume                        889,580

Dividend Yield                           N/A

Website                                    http://www.thompsoncreekmetals.com/

 

COMPANY DESCRIPTION

Thompson Creek Metals Company (TC) is named after their flagship mine. The Thompson Creek Mine is flush with molybdenum.  It’s a corrosive resistant mineral with an extremely high melting point.

Because of its unique features, it has countless industrial applications.

Thompson Creek also holds a 75% stake in the Endako Mine near Prince George, British Colombia. That one is also a molybdenum mine.

In addition to the mines, Thompson also owns the Langeloth Metallurgical Facility. They use the facility to ‘roast’ the molybdenum and turn it into an industrial grade oxide.

The Company also has four other exploratory properties in Canada.

 

FINANCIALS

Thompson’s financials look strong and are getting stronger.

Their revenue for Q2 was up 28.6% to 190.9 million.  Their six months’ revenue is up over 44% reaching an astounding $397.6 million.

The company is making good money.  Net income for the quarter reached $116.8 million or $0.70 cents per share.

Cash flow is strong with the company generating over $53 million in the second quarter.  Best of all, the Thompson Creek is sitting on a treasure chest filled with $560 million in cash!

 

KEY METRICS ANALYSIS

Trailing P/E                                       5.4

Price / Sales                                     1.7

Return on Assets                               7.2%

Insider ownership                               1%

Short Ratio                                        6.5 x

Current Ratio                                     5.5 x

Total Debt To Equity                           1.1 x

 

RECENT EVENTS

Thompson has been working towards diversifying their minerals.   They’re expanding beyond molybdenum into traditional metals like copper, and gold.  Perfect timing if you ask me.

The company is in the process of development and construction of the Mt. Milligan mine. They describe it as a conventional ‘truck-shovel’ open pit mine. It will include a processing plant with a capacity of 66,000 tons a day.

Thompson projects average production of 81 million pounds of copper and 194,500 ounces of gold a year. The mine has a projected life of 22 years.

 

MANAGEMENT TEAM

Kevin Loughrey – Chairman and CEO

Scott Shellhaas – COO and President

Pamela L. Saxton – CFO and Executive Vice President

Mark Wilson – CCO and Executive Vice President


STOCK ANALYSIS

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

 

Sales growth was big in 2011. And the company is about to diversify into gold and copper. Things are looking good for this company, and it’s had a strong year. Yet this company hit its 52-week low a couple of weeks ago.

Since that low it’s gone up .54 cents. The only thing holding this stock back is market worries. Once those dissolve get ready to see TC come back with a vengeance.

TC’s 52-week low was $7.05 and the 52-week high was $16.06.  Right now the stock is trading at $7.62.  The 50-day moving average is near $8.95 a share and the 200-day moving average is at $11.08.  The company has a market cap of $1.27 billion and 167.9 million shares outstanding.

 

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