IB Net Payout Yields Model

Freeport-McMoRan: Minting Cash


  • Freeport-McMoRan continues to benefit from high copper prices despite the recent dip from levels near $5/lb.
  • At $4.50/lb, the copper miner produces FCFs in the $8 billion range and EBITDA reaching $15 billion.
  • The stock is too cheap with a market cap of just $54 billion with the bullish long-term demand trend due to EVs.
  • This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More »
Freeport-McMoRan (FCX) fell to nearly $30 on fears of slowing Chinese demand for copper, yet copper prices remain sky high. At current prices, the copper miner is poised to generate billions of dollars in annual free cash flows. My investment thesis is Bullish on the stock in the mid-$30s, though investors should take some profits due to the historically volatile prices for the red metal.

Read the full article at Seeking Alpha. 

Disclosure: Long FCX. Please review the disclaimer page for more details. 

Update - Sept. 20

Copper is only down 2% to $4.16/lb, but of course people are gong to panic sell $FCX on these Chinese property developer issues. Freeport-McMoRan help $30 today in a positive sign. 

-Evergrande (OTCPK:EGRNF) (OTCPK:EGRNY) is down more than 11% today and has fallen more than 80% this year as it struggles to meet debt payments.
-The company has more than $300M in debt and has warned about default. It has an $83.5M interest payment due on Thursday for a March 2022 bond, according to Reuters.
-Domino effect: A collapse of Evergrande would have a domino effect on other China and Hong Kong property developers and a systemic effect on the rest of the economy, according to Jenny Zeng, co-head of Asia fixed income at AllianceBernstein.

Finviz Chart


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