1 Top TSX Mining Stock Set to Take Off in August

Here’s why investors seeking a top-notch mining stock will want to take a hard look at Teck Resources (TSX:TECK.B)(NYSE:TECK).

| More on:
A miner down a mine shaft

Image source: Getty Images.

Investors seeking a top-notch mining stock don’t have to go far in Canada. Indeed, Canada has some of the most undervalued mining stocks on the market right now. Accordingly, the TSX happens to be one of my favourite places to look for value today.

In the mining world, copper and base metals miners have become focal points of late. The rapid rise (followed by a significant selloff) in this sector has stoked interest among these plays for the first time in a while. Expectations of skyrocketing demand for industrial metals has spurred interest in companies like Teck Resources (TSX:TECK.B)(NYSE:TECK).

Indeed, it’s my view that copper and other base metals could still see upside from here. Given the recent selloff we’ve seen in commodities, this could be the breather long-term investors need to get in.

Let’s dive into why Teck is on my radar right now.

Bullish analyst outlook

RCB Dominion Securities analyst Sam Crittenden feels Teck Resources is set to have a financially robust second half. Teck Resources registered weaker-than-expected results in the company’s second quarter. However, Mr. Crittenden believes the mining company will greatly benefit from soaring metallurgic coal prices.

He also thinks that Teck Resources can trade for a better valuation in comparison to its peers in the next two years. But for that to happen, the company needs work on its Quebrada Blanca Phase 2 project (QB2). Teck experienced some hiccups at QB2 during the second quarter when 300 of its workers had to quarantine. However, the situation has improved. A reduction in camp restrictions has allowed Teck to ramp up and accelerate its production. Teck will be able to trade at better multiples once it completes developing the QB2 project.

Mr. Crittenden has kept an “outperform” rating for Teck Resources shares. He has increased his target from $35 to $37. As per Refintiv, the average target on Wall Street stood at $34.25. Currently, Tech trades around $27.50 per share at the time of writing.

Bottom line on this top mining stock

Copper is greatly benefiting from a bullish economic growth picture. There is a massive shift towards cleaner energy worldwide to tackle climate change. This metal is widely used in the renewable energy sector. As investments in green energy pick up momentum, the demand for copper has skyrocketed. Increased adoption of EVs and battery usage are likely to keep copper demand intact for the long term.

I think Teck’s current share price factors in only a portion of this bullishness. Accordingly, I think Teck remains a mining stock worth considering at these levels.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any stocks mentioned in this article. The Motley Fool owns shares of and recommends Teck Resources.

More on Metals and Mining Stocks

A stock price graph showing growth over time
Metals and Mining Stocks

Why Cameco Stock Soared 23% This Year

Cameco stock continues to ride high on strong supply/demand fundamentals and growing momentum in the nuclear industry.

Read more »

growing plant shoots on stacked coins
Stocks for Beginners

1 Copper Stock to Buy as Copper Prices Shine

The price of copper continues to climb, and more copper production is on the way for this top stock up…

Read more »

silver metal
Metals and Mining Stocks

Buy the Dip: 1 Dividend Stock Due to Shine

This dividend stock's dividend just rose higher as the price of silver dropped, but don't let that scare you off…

Read more »

risk/reward
Metals and Mining Stocks

Iron Stomach? 2 Riskier Stocks That Could Pay Off Big Time in the Future

Two TSX stocks could deliver greater earnings to investors with higher risk appetites.

Read more »

Gold bullion on a chart
Metals and Mining Stocks

This Gold Stock Just Dipped 5%: Time to Buy?

This gold stock has been rising higher and higher but recently went through a 5% dip in share price. So,…

Read more »

Gold king in chess game face with the another silver team on black background (Concept for company strategy, business victory or decision)
Stocks for Beginners

Pan American Silver: Buy, Sell, or Hold?

PAAS stock (TSX:PAAS) is up 44% in the last year alone! But it's not all down to the rise in…

Read more »

Nuclear power station cooling tower
Metals and Mining Stocks

1 Canadian Mining Stock Worth a Long-Term Investment

Strong fundamentals should continue to boost Cameco stock's long-term outlook, as the nuclear industry's momentum continues.

Read more »

Super sized rock trucks take a load of platinum rich rock into the crusher.
Metals and Mining Stocks

Lundin Mining Stock: Buy, Sell, or Hold?

Lundin (TSX:LUN) stock saw its shares surge this last year with the price of copper, and more strong guidance could…

Read more »