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Our Portfolio Manager, Sam LaBell, appeared on BNN Bloomberg to provide his take on Teck Resources Ltd. (NYSE: TECK, TSX: TECK.b) and why he prefers gold over copper. He also provided his reasons why he favours Air Canada (TSX: AC).
Teck Resources sold off its coal operations earlier this year and is now struggling with its remaining metals operations, he said. “The market is waiting to see how good a producer they are going to be.”
Copper has been a roller coaster ride this year because of its cyclical exposure to the broad economy and China, Sam added. “If you don’t want that type of volatility, if you want less cyclical exposure, we like gold a lot better.”
One gold name that Sam favours is Wheaton Precious Metals Corp. (NYSE, TSX: WPM) because of management’s track record of acquiring gold production streams at attractive prices.
Sam has also been following the demographic shift in North America, where boomers are retiring and millennials are now the largest spenders. Ideally, you want to invest in sectors where both cohorts are spending, such as travel and leisure.
“We’ve had a position in Air Canada. Obviously, there was a lot of uncertainty around their labour agreement, but that is settled,” he said. The Canadian airline market is attractive because it is less competitive than the U.S., yet Air Canada trades at a discount to U.S. airlines and has strong earnings power. “We see a lot of value in Air Canada.”
Watch the Replay: Teck Resources cutting full-year production forecast