Freeport-McMoRan: Copper Prices Holding Up
The amazing part of Freeport-McMoRan hitting new lows at $10 is that copper prices have held up relatively well at $2.70/lb. The company highlighted a position of solid cash flows with copper up at $2.85/lb.
The recent weakness gets the copper miner closer to breakeven levels on a free cash flow basis, but all of the upside is in a trade deal with China that boost copper prices. Back above $3/lb, FCX starts generating up to $3 billion in annual FCFs. Much higher prices are all but inevitable as the market weakness derails new mines.
Use this weakness for the ultimate entry point here for a stock with a market cap down to only $14 billion. The only problem here is that the stock could head lower. The chart shows a never ending downtrend.
Originally Published 10/25/18