This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Glass Half Full for Corning, Teck Resources

Stocks in this article: GLWTCKBVEFX

What is your top "sleeper" or "under the radar" stock pick?

Kessler: Teck Resourses, a Canadian metallurgical coal and copper company, is our top "under the radar" stock. With a $19 billion market cap, Teck is a large cap value stock, selling at book value, an 11x P/E, a manageable debt/capitalization of 28% and a cash hoard on the balance sheet of more than $4 billion. The stock is not well followed on Wall Street, despite its size and high-quality balance sheet. Teck is one of the world's largest miners/producers of metallurgical coal and has one of the all-in lowest cost of production and shipping among its competitors.

The stock fell sharply in the last year on concerns that steel consumption in China would be tempered as Chinese GDP growth estimates shrunk from 9.5% to 7% annually. By July of this year, investors' worries about Chinese steel demand had cut met coal stock prices by 40% or more, without regard to fundamentals, earnings quality or the ability to manage return on invested capital in a wide range of global economic environments. Teck is well positioned financially and operationally to weather a lower demand environment and thrive in even a modest global recovery.

What stocks or sector would your sell or avoid right now?

Kessler: As fundamental research-driven stock selectors, we do not make macroeconomic or sector rotation investment decisions in our portfolios. Instead, we use the information gleaned from our companies as well as input providers, end users and competitors, to create an investment context generated by bottom-up research. Currently, we are using premium valuation telecom and consumer staples names as sources of funds.

What is your outlook for 2013?

Kessler: Economic conditions in 2013 face headwinds. Global economies show few patches of significant growth, while slowing GDP is becoming the norm. Early indications are that North America should remain in non-recessionary territory in 2013, despite persistently high unemployment. Financial markets however generally anticipate and discount economic change.

We would not be surprised if equity markets corrected following their strong showing in three out of the last four years. We are positioning our value portfolios relatively conservatively -- buying strong balance sheets, well-positioned franchises with stable to increasing returns on invested capital, free cash flow generation and discounted valuations relative to their historic norms or to the market as a whole.

Edited for length and clarity.

-- Written by Gregg Greenberg in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,614.81 +215.14 1.31%
S&P 500 1,941.28 +37.27 1.96%
NASDAQ 4,419.4780 +103.4040 2.40%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs