First Quantum Minerals (FM.TO)

This scores poorly on a valuation basis. They have grown through acquisition and through debt, so they have a strained balance sheet which can be great in a rising commodity market, but is particularly bad in a declining market. Too early. He has a Short on this.

The big problem they were having was tax rates and the royalty rate structure in Zambia. That just got reversed to a certain extent. It continues to be one of the premier growth copper producers globally. Expects that over the coming few years, we will have global recovery, and commodity prices will be recovering. He feels Hudbay (HBM-T) is a little better positioned as it has greater exposure to zinc, which he thinks is looking better over the next 12-24 months.

The big picture cycle for commodities is relatively negative. However, there are countertrend things you can play. Chart shows this had a long downtrend from October/14, but now looks like it may be trying to base. If this breaks out around $17 with some volume and lasts for more than just a few days, it could be a sign of a decent rally, and you could see the stock return to the $20 area, maybe even into the mid-$20. He would not buy this until it broke out.

This has always been one of the favourite names for institutions to play. Management is quite excellent. Growth has been spectacular and has been able to grow production consistently. If you are thinking long-term, this would be one of the top holdings. Good copper exposure with some nickel. Doesn’t know if she would be buying this today.

A really volatile stock. Sold his holdings in July. The one thing that is interesting is the cluster of lows, which is where buyers come in. At this point it would be good for a trade. If you do, put your stop in at about $15-$15.60.

Base metals tend to do well from the 3^rd week in January right into April. However, we may see that bottom happening earlier, and it could start taking place in the next few weeks. Looking at the chart, we are back to the levels we where at in 2013, which is a positive sign. The chart this year shows it as being all downhill, and we haven’t seen a turnaround yet. We have a strong day that is happening right now, and that can happen over the next couple of weeks. Now is not a bad time to be looking to get into the sector but wait for it to pick up just a little bit more.

Commodities have rolled over fairly significantly. He would draw a big analogy to what is happening in the oil markets and what is happening in the commodity (iron ore and copper) markets generally. What we are seeing is that the Saudis are effectively trying to dry up market share by driving out the lowest cost producers. The challenge with that is that the turn-on/turn off costs is not necessarily large. In the mining space, the big companies are doing exactly the same thing by trying to drive marginal share producers out of the market. That will mean miners get turned off. When mines get turned off, it could be a $300-$400 million capX start-up program and you will likely see a supply/contraction longer term. We are a little early, but he would favour the big caps. This one is an interesting one and the balance sheet seems reasonable, but is a little more risky because its balance sheet is not as strong. (See Top Picks)

Probably one of the better quality metal plays. If you look at a chart on metals in general, it has been pretty soft for the last few years. This is a pretty good quality company. He would prefer to see a bounce off its support level, and then would consider owning it.

Metals and minerals may have a really between now and end of year, but the trend is lower and under performance. The cycle is done for them. The last marginal dollar of demand is slowing. Stay away from the sector.

Has been avoiding base metals for a while. China PMI's just came out and showed another slow down, so we are in a level of some contraction. There are currency issues that are occurring. He would shy away from base metals until there is some clear direction as to where the economy is.

Sold his holdings at about $22 when it broke down through a resistance point. Not a stock for the faint of heart. You want to see this hold support at its $16 level. It is trying to find a bottom. He would rather pay something like $19.

A copper company. The charts are unbelievable here. He would prefer CS-T or LUN-T.

(Top Pick Oct 2/13, Up 19%) He thought the base metals were under loved at the time. It jumped out of the gate and now the spread from materials in general is widening. Short term we still have this upward channel.

It doesn’t look like China’s growth is falling off the table, but has actually stabilized. If that’s the case, they are going to need a lot more copper. As the US economy expands, and we see construction increasing in the US, copper is going to be needed. If you believe inflation and growth are going to pick up, this should be on your radar screen. There are a lot of moving parts and there are a lot of different countries. Things can get scary when you are exposed to that.

Was a real fan of Inmet before this company acquired them. Everything they were doing seemed to make so much more sense than what Inmet was doing. Stock hasn’t moved as much is he wanted it to. Doesn’t think there is a lot of room for copper.