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Taseko Mines Ltd. Message Board

  • blackyjacky21 blackyjacky21 Nov 3, 2010 2:26 AM Flag

    THIS STOCK IS CHEAP when compared to other copper companies.

    Note#1: On January 4, 2010 TGB traded at $4.30. This was the price before the Provincial EA certificate was granted to Taseko, so it shouldn't include any value for Prosperity.

    Note#2: Average price of copper between December 15, 2009 and January 15, 2010 was approximately 3.25. Copper is up approximately 18% since then.

    Note#3: If you compare FCX price on January 4, 2010 to today's price, the stock price is up approximately 18%

    Note#4: Taseko has approximately $1 in cash per share.

    Note#5: Taseko has already made 62 cents per share this year, and this doesn't include the last 2 quarters. (Info from Yahoo finance site)

    Conclusion: If you add 18% to 4.30, you get a value of $5.07. Subtract $1 from this price due to the cash on hand. Even if TGB makes no profit in the last 2 quarters of this year, the stock trades at 6.5 P/E (4.07/.62).

    And the company has already hinted that production has increased and profits are rising.

    My conclusion: THIS STOCK IS CHEAP at $5.07
    Anyone who sells this stock lower than that price is obviously in a state of panic. You'll regret it in the next week. Short-term investors will leave and long-term investors will step in and buy your shares and the price will go back up again.

    I think the stock should trade at 10 times forward P/E like many other mining companies. This puts TGB at $7.50 even without approval of Prosperity.

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    • To futher support my argument, there is any article on Motley Fool dated yesterday, November 3. The title of the article is "3 Sectors with a Tailwind". The writer of the article states: "In the materials arena, Taseko Mines (AMEX: TGB) stands to benefit from not just from its gold exposure, but also from rising copper prices. Yet it trades for just more than 10 times trailing earnings, well below its peer group average, and about half its own five-year average."

      This further supports my argument that even at 10 times trailing P/E it is "well below its peer group average".

      Even if TGB makes 13cents per quarter, that's 52 cents per year. At 10x P/E, the price should be no less than $5.20.

      But TGB made 62 cents in the firts two quarters alone. If they make 13 cents this quarter, then that would be 75 cents in 3 quarters.

      My opinion is that TGB is worth $7.50, AS IS, without Prosperity as long as copper remains at $3.80 and gold at $1300.

      Those who sold yesterday out of panic just got ROBBED by the BIG BOYS.

    • Very good points; but we should not forget Prosperity! It will get approval; TGB will have to jump through a few more hoops. It is a setback and a delay; but it will happen. And several months delay is not very significant in the long term.

      Also, imagine what TGB would be worth after it is approved.

      • 2 Replies to jrfillion
      • Also - remember the cash raised on open market at $6.25+. That is good for people planning to hold for long!!!

        Wicked thought!! May be, TGB should talk to Thompson Creek.... Together, they are a mightier force with stron production of Copper, Moly and an approved gold mine. TGB should be able to supply the mining contractors and get the TC mine to production faster!!! You never know how creative companies could be in creating shareholder value!!

      • Agreed! It will happen, but it could be a long delay. Time to pick up a few more cheap shares and wait. There are a lot of positive things about this company and copper will always be in demand. Maybe China will step in with more cash as they did with Teck. At this point do what YOU need to do.

    • Great post blackjack. Though yesterdays news is disappointing I hardly think the company will sit on their hands. This is still a solid company and earnings are just around the corner. Based on their presentation I believe earnings will show further growth and prove to the market that Taseko is still a great investment.

      http://www.tasekomines.com/i/pdf/TKO_Presentation_Nov2010.pdf

    • You are exactly correct. At these depressed prices, TGB is the best valued copper miner. Prosperity will eventually be approved under a revised plan.

    • blackyjacy excellent post!! people panicked and sold and all the fear mongers on this board dont help any

      • 2 Replies to danbevtsa
      • You're right too. Some people are positioned short and want to try to scare people into acting irrationally. Others just want to buy as cheap as possible, so they can make a killing in a few days. I've been holding shares since they traded around $1. I like to make rational long term investments - I am a fan of Warren Buffett's methods.

        Everyone, of course, has a right to their opinion whether positive or negative, but those of you acting maliciously to try to make a buck are a bunch of losers in life.

        If you're not long the stock, why waste your time talking down the stock on this message board? Go find a better company and invest. My guess is that many, not all, who are bad mouthing the stock now either are short or want to buy as cheap as possible.

      • Just like in July, people sold in panic. My view is that if you didn't buy alot very recently, the sky not falling, no need to worry as the price will recover in any event. Remember earning coming out next week so there will be plenty of people buying up too. May be better when prices stablilize upward if you wanna sell.

    • The stock isn't cheap and shouldn't trade at a P/E of 10. Their cash costs are much higher than many of the other miners, which means that in a downturn, unlike the majority of other mines, Taseko's mine starts bleeding cash and has to be put on care and maintenance and the stock plunges to about $1 or so. A lot of the large miners have mines producing at copper cash costs of under 1.00 per lb and can continue producing in weaker times.

      • 3 Replies to xenogames95
      • "Xenogames" calls himself that for a reason. He has "xenophobia". In this case his irrational fear is being projected towards TGB longs...

        Xenophobia is an irrational, deep-rooted fear of or antipathy towards foreigners. It comes from the Greek words ξένος (xenos), meaning "stranger," ...

      • Recall: During the market collapse FCX traded at around $17 and copper was priced around $1.35. Recently FCX traded at $100 and copper around $3.86. FCX has almost gone up 6 times from it's low price.

        TCK Teck Resources traded around $3 when copper was priced at $1.35. Now TCK trades at $45 up 15 times from it's low.


        TGB's recession low was arounnd 60 cents when copper was priced at $1.35.

        6x .60 = 3.60
        15x .60 = 9.00
        Average the two values and you get $6.30. Wasn't this the price TGB was trading at in the last couple of days? Is this just a coincidence, or might I be making a reasonable analysis?

        Smaller companies are more vulnerable during recessions making TGB stock more volatile. Wish I had bought shares at 60cents. Bought some around $1 however.

        If you want TGB to go back to $1, then you'll have to hope for a double dip recession so that copper prices go back to $1.35. In that scenario, all equities will fall; not just TGB. Have you noticed that the rest of the market has been going up since August 24th?

        QE2 likely today => Dollar falls => copper and commodities rise.

      • Wow! Did you just make up the whole story right off the top of your head? You wouldn't want to own any copper miner if copper prices plunge. They will all go down hard in a downward copper plunge and TGB would be no exception. At $1 share price, TGB could buy all of the shares from the dummies and take the company private, so you are just fear mongering. Copper prices are high and the fundamentals are excellent with TGB going forward.

 
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