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Teck Resources in 2017: From Stake Sale to Share Buyback

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Teck Resources in 2017

As we saw in the previous part of this series, Teck Resources’ (TECK) 2017 price action lagged the broader metals and mining space for most of 2017. Prior to that, in 2016, the company was among the biggest gainers in the mining sector (GLEN-L). Although the stock managed to rise 23.9% in 2017 due to the so-called Santa Claus rally in December 2017, it was a lackluster year overall for the company considering the sharp gains in some of the other mining companies. Let’s look now at some of the factors that impacted Teck Resources in 2017.

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Stake sale

In September 2017, China Investment Corporation sold almost half of its stake in Teck Resources. The news triggered a sell-off in Teck Resources. However, in November 2017, Teck Resources announced a supplemental dividend and share buyback. Generally, companies announce a share buyback when they believe their stocks are undervalued by the financial markets. The stock saw an upward price action after it announced the share buyback.

Teck Resources also faced a labor action at one of its copper mines in December 2017. However, the company managed to subsequently reach a deal with the striking workers. There were labor-related incidents at several copper mines in 2017. Freeport-McMoRan (FCX), BHP Billiton (BHP), and Southern Copper (SCCO) all faced labor actions that year. We could see more labor-related incidents in 2018 at copper mines since several labor contracts are coming up for negotiations in 2018.

With 2017 now behind us, it would be helpful to see what factors could drive Teck Resources in 2018. In the next part, we’ll see how Teck Resources’ growth drivers could change in 2018.

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