As trading wound down for the week Friday, shares of copper/molybdenum/gold miner Taseko Mines (NYS: TGB) finished the week with a two-day sprint -- and a 5% gain. For this, you can probably thank Federal Reserve Chairman Ben Bernanke, for his $40 billion promise to print as much money as it takes to stabilize the U.S. economy -- a promise that ... er, promises to undermine the integrity of the U.S. dollar but boost the value of commodities such as the minerals Taseko digs out of the ground. But here's the bad news: It won't last.

 

At least not according to the analysts at Bank of America. On Thursday, B of A initiated coverage of Taseko with a rating of "underperform" (i.e. "sell"). Details of the rating are hard to come by. Not even our friends at StreetInsider.com, which reported the rating, know what prompted it. But it's not too hard to figure out what might scare an investor away from this stock, which S&P Capital IQ says rates "lower than 94% of all companies for which an S&P Report is available [for] investability."

 

 

Priced at 38 times earnings, Taseko Mines is one very expensive stock -- a fact that's probably contributed to its underperforming the S&P 500 by more than 23 points over the past year. Reports of a $150 billion Chinese stimulus plan last week, combined with Bernanke's move this week, have helped to narrow that performance gap, but not all analysts are convinced.

Last month, for example, Deutsche Bank issued a report on fellow copper miner Freeport-McMoRan (NYS: FCX) , dismissing hopes for a stimulus-inspired rebound in copper prices as mere "noises in the market," and warning of a dangerous level of copper oversupply in China.

 

How bad is the oversupply problem? Earlier this week, The Wall Street Journal reported that inventories of copper that are crowding Chinese warehouses are up 20% since just July. In a column with no shortage of visuals, the Journal noted that at one warehouse, "some piles had reached the ceiling ... the metal was being lined up outside some buildings. The earth beneath some huge piles was beginning to crack under their weight." Then, switching to understatement, the Journal quoted one analyst deadpanning that this is "much more metal than we had expected" to find.

 

No kidding - Copper stacked to the rafters? So much copper that its weight has started to crack the Earth's crust and fall right back in? Yeah, I'd say that's a lot of copper. It's also probably not great news for Taseko Mines.

 

Granted, Taseko bulls will argue that the company is cheap on both a forward P/E basis and on price-to-book. But remember -- "forward" earnings are earnings that haven't actually been earned yet ... and may never be.

 

As for price-to-book, it's true that at just 1.3 times book value, Taseko looks cheap relative to Freeport's 2.4 P/B ratio. But Freeport has the virtue of being a cash-generating enterprise, which has generated $1.5 billion in free cash flow over the past year. Taseko, in contrast, burned $84 million and has been free cash-flow negative in four of the past five years. In this regard, Taseko more resembles rare-earths miner Molycorp (NYS: MCP) , or Thompson Creek (NYS: TC) , which, like Taseko, mines molybdenum. These companies -- cash-burners both -- receive price-to-book ratios far below 1.0.

 

For that matter, fellow Canadian miner Teck Resources (NYS: TCK) , which also does copper and molybdenum, generates positive FCF -- and still sells for a lower P/B (1.0) than does Taseko.

 

As a short-term play on irrational exuberance over promised stimulus programs in China and America, Taseko mines appears to be working out. But as no less an investor than Warren Buffett once famously observed, it's only "in the short term [that] the market is a popularity contest; in the long term, it is a weighing machine."

 

And so far, Taseko isn't measuring up.