I don't think it's an exaggeration to say that some percentage of Freeport McMoRan (NYSE:FCX) shareholders, or former shareholders, hated the company's decision to acquire
Plains Exploration and McMoRan Exploration. These shares are down about
22% from the time just before the announcement, though miners like BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RIO), and Southern Copper (NYSE:SCCO) haven't fared dramatically better in what has been a pretty unpleasant market for basic materials stocks.
With the deals done, it's time to get over the disappointment regarding
the oil and gas transactions and just accept Freeport McMoRan for what
it is today – an incrementally more diversified natural resources
company with a hefty amount of debt and high leverage to global economic
growth. Given that I do not believe that the oil & gas properties
will be value-destructive (in total) from this point on and that the
valuation already prices in further copper price erosion, Freeport
McMoRan stock does hold some appeal at these prices.
To read more, please follow this link:
http://www.investopedia.com/stock-analysis/061413/freeport-mcmoran-its-time-get-over-it-and-move-fcx-bhp-rio-scco.aspx
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