Vous êtes sur la page 1sur 3


Copper & Gold Inc. (NYSE: FCX)

SHORT-TERM TRADE RECOMMENDATION Buy the August 2013 $27 put @ $28. - Net Debit to start: $0.28 - Maximum risk: Net debit Trade rationale: FCX has demonstrated a pattern of bearish technical signs, but it looks undervalued at this price level. FCX may be a good candidate for the long term and for dividend lovers, but for short term we expect a correction. Our overall score for FCX is 5.5

Sector: Basic Materials STOCK PRICE TRENDS Market cap Yesterdays close 52-weeks range Technical analysis

Industry: Copper

27.65B $28.21 $26.37 $43.65 Negative

GROWTH AND BALANCE SHEET The company reported that it earned $482 million, or 0.49 cents earnings per share, for the quarter that ended June 30. That's down from $710 million, 0.75 cents earnings per share for the same quarter last year. Revenue decreased 4.2%, to $4,288 million from $4,475 million. The decrease in revenue is due to decrease in Average realized price per pound for copper in the second quarter versus the same quarter last year, $3.17 versus $3.53, accordingly. Furthermore, the Unit net cash cost has increased in the second quarter of 2013 to $1.85 from $1.49 for the same quarter last year. In addition to this, the Average realized price per ounce for gold has decreased to $1,322 this years second quarter, from $1,588 for the same quarter last year. It is the same case with the Molybdenum Average realized price per pound, $12.35 for the second quarter of 2013, compared to $15.44 for the same quarter 2012. FCXs consensus earnings per share for the quarter ending September 2013 are from 41 to 85 cents per share. Operating margin was 14.9 percent, compared to 29.3 percent in the second quarter of fiscal 2012. The decrease is mainly due to decrease in average realize price for the companys products. Cash flow from operating activities was $1,034 million, compared to $1,182 million in the second quarter of fiscal 2012.

VALUATION FCX PE stands at 10.05 below the industry average of 13.2 and below the S&P 500 average of 18.59. The company is currently trading below the preferable P/E ratio of 15x, and over the last five years, the companys shares have traded in the range of 2.84x to 31.294x trailing 12-month earnings. FCX's current Price/Sales of 1.55 is below the average of its industry, of 1.63. FCXs head to head comparison to its main competitors shows that the company has satisfying gross margin and operating margin compared to its peers, and higher EPS. The stock is currently trading below its intrinsic value of $32.39 this suggests that the stock is undervalued at these levels. The beta of 2.39 implies much higher volatility of the stock with respect to the S&P 500. FCX has shown neutral earnings consistency over the last five. FCXs earnings per share over the last five years have declined by 2.96. The current quarter earnings in comparison to the same quarter last year have declined by 30.10% which is below the required level of 15%. The reason for this being the low Average realized price on the company products with respect to the same quarter last year. FCXs current price levels are below the preferable level, 35.4% below the 52 week high of $43.65, and the technical indicators are negative. The majority of the analyst ratings are buy and outperform. FCXs Total Debt/Equity of 85.79 is above the required maximum, and it is slightly above the industry average of 82.3. FCX has a dividend payout ratio of 80%. VIEW: HOLD 7/31/2013

FCX Score
Intrinsic value of the stock Financials Sentiment Analyst ratings Earnings Consistency Total Debt/Equity Quarterly EPS change Annual Earnings Growth Current Price Level P/E Ratio Insider Ownership Technical Analysis
More info on Tradespoon Scores

7 6 8 8 6 3 2 2 4 9 3 3

About FCX Freeport-McMoRan Copper & Gold Inc. (FCX) is an international mining company. FCX is one of the leaders in copper, gold and molybdenum mining companies in terms of reserves and production. Its portfolio of assets includes the Grasberg minerals district in Indonesia, mining operations in North and South America, and the Tenke Fungurume (Tenke) minerals district in the Democratic Republic of Congo (DRC). The Grasberg minerals district contains the recoverable copper reserve and the gold reserve. It also operates Atlantic Copper, its wholly owned copper smelting and refining unit in Spain. FCX has its operations into five primary divisions: North America copper mines, South America mining, Indonesia mining, Africa mining and Molybdenum operations. In May 2013, the Company completes acquisition of Plains Exploration & Production Company. In June 2013, FCX acquired the remaining 64% interest in McMoRan Exploration Co.
Competitor Comparison FCX Market Cap: 27.65B Employees: 34,000 Qtrly Rev Growth -0.04 Revenue 17.80B Gross Margin 0.39 EBITDA 6.39B Operating Margin 0.27 Net Income EPS P/E PEG P/S 2.70B 2.81 10.05 1.51 1.55 NEM 14.99B 16,400 -0.11 9.13B 0.45 3.14B 0.2 - 733.00M -1.34 N/A -0.73 1.64 SCCO 22.68B 12,085 -0.15 6.24B 0.55 3.27B 0.47 1.62B 1.91 14.06 1.1 3.64 Industry N/A N/A 0.3 N/A 0.21 N/A 0.13 N/A N/A 13.2 N/A 1.63

Tue, Jul 30, 2013 Great Copper Play For Your Portfolio Fri, Jul 26, 2013 In Insider Trading, Freeport-McMoRan Leads Insider Purchases While Facebook Inc's CTO Sells Stock Wed, Jul 24, 2013 Copper & gold prices set to rise: Fund manager Wed, Jul 24, 2013 Here Comes Copper's Comeback FCX Strengths Global market leader Geographically diversified Economies of scale FCX Weakness Acquisition integration Volatile commodity prices Stock valuation model The model rates stocks from 1 to 10, with 10 being the best using a system of advanced mathematics to determine a stock's expected risk and return. I am using different fundamental and technical factors in order to rank a stock. Intrinsic value of the stock Investors should buy stocks selling at a discount to their intrinsic value, and then patiently wait for the fair value of their investments to be realized.
KMB Intrinsic Value EPS ttm EPS Growth (Assumption) PE DIVIDEND PAYOUT EXPECTED STOCK RETURN in 2022 Forecasted Stock Price Earnings Per Share after the 10th year TOTAL DIVIDENDS Forecasted Stock Price in 2022+DIVIDENDS Net Present Value 34.38 58.75 5.85 2.81 1.08 10.05 80% 1.11 Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 TOTAL EPS EPS 3.02 3.25 3.50 3.77 4.05 4.36 4.69 5.05 5.43 5.85 42.98

Freeport-McMoRan Copper & Gold Inc. VALUATION FCX Market Cap: 27.65B Beta Enterprise Value 50.25B 1 Month Stock Returns Year to Date Stock P/E 10.05 Returns PEG Ratio 1.51 1 Year Stock Returns Price/Sales 1.55 3 Year Stock Returns Price/Book 1.39 52-Week Change EV/Revenue 2.82 S&P500 52-Week Change EV/EBITDA 7.86 52-Week High Dividend Yield 9.10% 52-Week Low 50-Day Moving Average Held by insiders 0.85% 200-Day Moving Average

2.39 3.34% -12.15% -10.91% -9.52% -15.77% 22.59% 43.65 26.37 28.38 31.44

93.13 32.39

Highlights: Freeport-McMoRan is an international mining company. The stock closed yesterdays trading session at $28.21. In the past year, the stock has hit a 52-week low of $26.37 and 52- week high of $43.65. The intrinsic value of the stock is above the current price. FCX has a market cap of $27.65 billion and is part of the Basic materials sector. NEWS and CALENDAR

FCXs intrinsic value is $32.39 the current price is $28.21, the stock trades below its intrinsic value. The Sensitivity analysis of the stock varying the growth rate of the EPS are presented in the table below.
EPS Growth (Assumption) Value

6% 6.5% 7% 7.60% 8% 8.5% 9%

28.51 29.67 30.88 32.39 33.43 34.79 36.2

Based on the prospects of the company the valuation range is from $28.51 to $36.2. Financials The financial health of the company the higher the better, we evaluate all the financial ratios of the company. Sentiment Investors sentiment for the stock. Analyst ratings The model assigns a value according to analysts recommendation for the stock. Analyst rating on Reuters.com is 7 Buy, 7 Outperform, 5 Hold, and 1 Sell. Earnings Consistency We are searching for EPS numbers that are better than the previous year's. One dip is allowed, but the following year's earnings should be higher than the previous year. FCXs annual EPS for the last 5 years were -14.86, 2.93, 4.57, 4.78, and 3.19 this type of earnings action is neutral. Total Debt/Equity The company must have a low Debt/Equity ratio, which indicates a strong balance sheet. The Debt/Equity ratio should not be greater than 20% or should be less than the average Debt/Equity for its industry FCXs Total Debt/Equity of 85.79 is well above the required maximum, and it is slightly above the industry average of 82.3. EPS This Quarter VS Same Quarter Last Year The EPS growth for this quarter relative to the same quarter a year earlier is above the minimum 15% that this model likes to see for a "good" growth company. Stocks with improving earnings are worthy of your extra attention. FCXs EPS growth for this quarter relative to the same quarter a year earlier is -32.10 %, well below our target. Annual Earnings Growth This stock valuation model looks for annual earnings growth above 12%, but prefers higher than 20%. FCXs annual earnings growth rate over the past five years is - 2.96%, well below the target growth rate. Current Price Level Investors should keep an eye open for stocks that are trading within 10% of their 52-week highs, as it is likely to continue in its upward trend.

FCX's 52 week high is $43.65 current price is $28.21, is 35.4% below the 52 week high. P/E Ratio The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which in this model states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. The company has a P/E ratio of 10.05 the average industry P/E ratio is 13.2 and is below the S&P 500 P/E ratio of 18.59. Insider Ownership When there is strong insider ownership which we define as 8% or more, management is more likely to act in the best interest of the company, as their interests are right in line with that of the shareholders. Insiders own 0.85% of FCX stock. Management's representation is not large enough. This does not satisfy our minimum requirement; companies that pass this test are more attractive to our valuation model. Technical Analysis The model is using several technical indicators (MACD, RSI, MFI, OBV, position Indicators) to forecast the trend of the stock for 6 and 12 months, and assign a value. FCX is trading in the range of $26.95 - $30.14 in the past 30 days. The stock has been showing support around $28 and resistance in the $29 range. The stock is trading below the 50-Day Moving Average and 200-Day Moving Average. RSI(14): 45.84As can be seen from the graph on page 1, the stock has been falling since early February and it seems that it has not found any support. Furthermore, the company has recently reached the psychological resistance level of $30 and has not been able to break it. The stock is headed south towards another support psychological support level of $27, if it breaks it down it might go south. Our indicators give a negative view on FCX.