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July 31, 2006

Switching from PD to TCK in Cara 100, Mon., July 31, 2006, 3:52 PM

On a glorious day where Phelps-Dodge stock is up about +8.0 pct on speculation of a Grupo Mexico bid, I think it is appropriate to drop it from the Cara Global Best 100 Companies list in favour of Teck-Cominco.

The PD stock is also up because rival Teck looks like it will be the winner for Inco, which had been a concern to the Phelps-Dodge shareholders. Isn't it interesting that shareholders would prefer their companies to be prey than predator? Isn't being cashed out what most traders want today?

Of course, since I can only have 100 in the top 100, that doesn't mean I don't still like Phelps-Dodge. I do in fact. It's just that I was waiting for (i) TCK to gain a NYSE listing, which they got recently, and (ii) the company to make its bid for Inco (N), which they did this morning, topping the bid from Phelps-Dodge.

I think you will soon see Vancouver BC-based Teck-Cominco win this bid competition, and be better supported in the Canadian financial community than would Phoenix AZ-based Phelps-Dodge. Besides, Phelps-Dodge is a copper miner and Teck is much more diversified.

But it was the metrics that made me switch. Teck-Cominco simply is an outstanding operator, regardless of the type of mine they control, as you will see from these metrics.

002v013.gif

I have known the Teck-Cominco people it seems forever. One year, I toured the electrolytic zinc and lead smelter and refining complex in Trail BC on a mining analyst tour I helped a mining promoter set up because I told him if I couldn't take the top mining analysts in Canada through that new billion dollar complex to meet management, I might get 2 or 3 instead of the 23 we got. So we set it up. What a fantastic plant.

Now you do know, of course, that being listed in the Cara 100 doesn't neessarily mean the stock is worthy of purchase at any time. It's just a watchlist of the top quality companies I follow. As you also know, I have an Accumulation zone and a Distribution zone for the stock.


002v014.gif

Teck-Cominco Ltd. [GICS 15, Cara 100 added July 31]
(TCK: Yahoo Finance file)
(TCK: StockChart chart)
(TCK: Investertech chart)
(TCK: ADVFN Financial Data)(TCK: ADVFN Financial Data)

Phelps-Dodge Corp. [GICS 15, Cara 100 removed July 31 2006, Cara 250 added July 31 2006]
(PD: Yahoo Finance file)
(PD: StockChart chart)
(PD: Investertech chart)
(PD: ADVFN Financial Data)(PD: ADVFN Financial Data)

Posted by Posted by Bill Cara on July 31, 2006 03:52:04 PM | Category: 15 Materials , Cara Global 100 Best Companies