The numbers vary a bit depending on the timeframe used, as well as spot vs. futures prices, but the fact remains that the shares of Freeport-McMoRan (NYSE: FCX) more or less track the price of copper with a great deal of fidelity and consistency. While many analysts have tried to point out the organic growth potential of Freeport and argued that the quality of its asset base deserves better treatment, the reality is that the stock is a proxy for copper.
Looking out across 2012, though, that doesn't seem like such a bad thing. True, there are ample economic worries in all corners of the globe. It's also true that production costs are rising and companies are bringing on enough capacity that there may be a global surplus in 2013. All of this is already in the market, though, and the reality is that about the only way to make money in a stock like this is to buy when it's unpopular and there are explicit worries about copper prices. For instance, in just one month the average analyst EBITDA estimate for Freeport in 2012 has dropped by one-quarter.
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With Worries About Global Growth, Consider Freeport-McMoRan
Showing posts with label copper. Show all posts
Showing posts with label copper. Show all posts
Wednesday, January 11, 2012
Monday, October 11, 2010
Copper ... It's Back
Gold gets all the attention, but copper has staged a pretty remarkable recovery from its early summer lows. After bottoming out below $2.80 a pound, the December contract is near $3.70 and the highs of 2008 are in sight. Considering just how useful copper is in so many industrial, construction and communications applications, an ongoing global economic recovery should be a solid demand driver.
Most of the major copper producers have already run up in concert with the price of the metal, but investors may want a refresher course on the major players with an eye toward buying the inevitable dips.
Freeport-McMoRan (NYSE: FCX)
These are the fat times for Freeport-McMoRan, as this company is not only a major copper producer, but a major gold miner as well. At current prices, the 83 billion pounds of copper and nearly 34 million ounces of gold in Freeport's reserves are worth over $800 per share. Of course, that does not include the costs of extracting those resources (nor the risk of lower future prices), but it should give investors a sense of the magnitude of Freeport's resources. Freeport has long since diversified its reliance upon its Indonesia mine to a tolerable level, and the company produces more than 10% of the world's annual copper output. (For more, see Taking A Shine To Copper.)
For the full article, please click on the link below:
http://stocks.investopedia.com/stock-analysis/2010/Copper---Its-Back-FCX-SCCO-TGB-TCK-RTP-BHP1011.aspx
Most of the major copper producers have already run up in concert with the price of the metal, but investors may want a refresher course on the major players with an eye toward buying the inevitable dips.
Freeport-McMoRan (NYSE: FCX)
These are the fat times for Freeport-McMoRan, as this company is not only a major copper producer, but a major gold miner as well. At current prices, the 83 billion pounds of copper and nearly 34 million ounces of gold in Freeport's reserves are worth over $800 per share. Of course, that does not include the costs of extracting those resources (nor the risk of lower future prices), but it should give investors a sense of the magnitude of Freeport's resources. Freeport has long since diversified its reliance upon its Indonesia mine to a tolerable level, and the company produces more than 10% of the world's annual copper output. (For more, see Taking A Shine To Copper.)
For the full article, please click on the link below:
http://stocks.investopedia.com/stock-analysis/2010/Copper---Its-Back-FCX-SCCO-TGB-TCK-RTP-BHP1011.aspx
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