Showing posts from November, 2016

IB Net Payout Yields Model

Why Freeport-McMoRan Isn't Expensive Even Above $20

Copper prices have rocketed above even the targets used in the copper miners' presentations. Freeport-McMoRan is highly cash flow positive at copper prices around $2.50 pound. The stock offers interesting value even after the huge surge in the stock price. The recent copper rally apparently caught most investors and analysts off guard. Analysts are either scrambling to upgrade the stock or discredit the rally. The long  misunderstood story  with  Freeport-McMoRan  (NYSE: FCX ) was that the copper miner needed higher prices in order to clear the debt issues. In reality, the current copper prices might be enough for the company to thrive. The question now is when to lock in gains. Read the full article on Seeking Alpha. Disclosure: Long FCX. Please review the disclaimer page for more details. 

Allergan: One Impressive Plan

Allergan recently missed Q3 estimates that should mostly be ignored. The growth pharma has a huge capital return plan that overrides current earnings weakness. The net payout yield will push into one of the top yields in the current market. Allergan  (NYSE: AGN ) hit our radar screen due to the combination of two key signals: plunging stock price and massive capital return plans. The market typically runs away from a stock at the wrong time and these contrary positions can signal the market has the situation wrong. The stock closed last week around multi-year lows of $195. With politicians increasingly attacking drug pricing and the costs in the healthcare system, are the capital return plans enough to consider buying the massive dips in Allergan from a high near $340 back in 2015. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details.