NEW YORK (TheStreet) -- Teck Resources (TCK) shares closed trading up by 3.21% to $7.05 on Friday, after the gold miner announced plans to to combine its Relincho asset with with the El Morro mine in Chile to create a $3.5 billion project.
Goldcorp and Teck said that combining the two projects would cut down on the development costs of the projects which are located approximately 40 kilometers apart.
"Combining these two neighbouring assets is a common sense approach that allows us to consolidate infrastructure to reduce costs, reduce the environmental footprint and provide greater returns over either standalone project," Teck CEO Don Lindsay said in a statement.
"The combination of El Morro and Relincho is consistent with our focus on maximizing value from our asset portfolio," said Goldcorp CEO Chuck Jeannes.
Separately, TheStreet Ratings team rates TECK RESOURCES LTD as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TECK RESOURCES LTD (TCK) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite the weak revenue results, TCK has outperformed against the industry average of 18.9%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.48, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.27 is sturdy.
- Looking at the price performance of TCK's shares over the past 12 months, there is not much good news to report: the stock is down 72.02%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- TECK RESOURCES LTD's earnings per share declined by 21.4% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, TECK RESOURCES LTD reported lower earnings of $0.63 versus $1.66 in the prior year.
- You can view the full analysis from the report here: TCK Ratings Report