Freeport-McMoRan (FCX) is the world’s largest publicly traded copper company, selling around 4 billion pounds of copper every year. It mines reserves of copper, gold and molybdenum with mining operations in North America, South America, Africa and Indonesia. This company’s market capital is near $36 billion. It has gained a good rank in the top 25% of the coverage universe. The company has a history of returning cash to its shareholders through dividends. The dividend amount depends on the company’s financial outcome, cash requirements and future prospects.
I believe Freeport-McMoRan stocks are one of the leading stocks that trade inverse to the U.S. dollar index futures. However, if the U.S. dollar index begins to catch a bid higher than its stocks, it could come under selling pressure. In my opinion, precious metal stocks will be the first equities to catch a bid, when the U.S. dollar index reduces. As long as the U.S. dollar continues to trade lower, the metal stocks will do well.
I hope Freeport-McMoRan is in a comfortable position compared with its competitors like Newmont Mining (NEM) in the production of copper and gold and Barrick Gold (ABX) in gold. Copper, gold and molybdenum are greatly in demand in growing economies like India, China and Russia. Freeport-McMoRan seems to be in a better position in this highly cyclical industry.
I believe mining companies are directly linked to the price of the commodities they produce. Hence, there may be times where the stock price may not reflect the actual value of the companies. To continue reading, click here.