| Freeport-McMoRan Shares Tumbling Again After Being Turned Back At Resistance | |
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Freeport-McMoRan Inc (NYSE: FCX) shares were starting to show some hopeful signs recently after a miserable decline (down 60 percent over the last year). However, there may have been a successful hold of resistance at $24.15 by the bears at the beginning of May. Since then, the stock has been in tumble mode with prices closing out Tuesday at $21.29.
The recent rally in the euro/decline in the U.S. dollar had "stuff" on the rise – and the "stuff stocks" tagging along for the ride. However, with the euro beginning to decline again on Greece worries, does the company have the internal fundamentals to ride out a renewed decline in "stuff" prices? Let's take a look at the fundamentals and technicals for Freeport-McMoRan.
What The Bulls See
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A dividend yield of 0.90 percent.
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Some very cheap valuation metrics: An enterprise value of $47.16 billion which easily trumps the market capitalization of $22.14 billion, a price-to-sales of 1.12, a price-to-book ratio of 1.46 and a P/E ratio of around 10 versus estimated revenue and EPS growth for next year of 29.3 percent and 298 percent, respectively.
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A current ratio of 2.01, indicating that they may be okay in the short-term in terms of viability.
What The Bears See
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Negative net profit margins (20.83 percent).
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Weak management effectiveness ratios: A return-on-assets ratio of 3.99 percent and a return-on-equity ratio of -16.07 percent.
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A very difficult balance sheet situation: Total cash equivalents of $549 million versus total debt of $20.31 billion and a debt-to-equity ratio of 97.72 percent.
The Technical Take
Technicians note that FCX shares seem to have been rejected at "correction resistance" at $24.15. Unless and until that level is conquered, they say, the bears are to be deemed "in control" overall.
Above $24.15, the next two layers of potential resistance come in at $27.25 and $29.34. On the downside, the technicians say that support for FCX seems to come in at the horizontal lines of $20.83 and $19.85. However, those technicians note that FCX, if it were to fulfill one set of technical calculations (the most bearish set), would trade all the way down to $5.85.
Let's hope that is not the reality in the future, as it would likely mean some sort of global economic upset.
Overall...
While the valuations of Freeport-McMoRan seem to be very attractive, the balance sheet is troubling and the technical outlook (as long as FCX remains below $24.15) is bearish. Under those conditions, it is tough to justify taking heavy long positions in the company's stock. Perhaps if the most bearish technical scenario plays out, both the fundamental, valuation and technical bulls will all jump aboard the FCX bandwagon in unison.
See more from Benzinga © 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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Freeport McMoRan Copper and Gold Inc.
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PRODUCER |
CODE : FCX |
ISIN : US35671D8570 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Freeport McMoran is a gold and copper producing company based in United states of america. Freeport McMoran produces gold, copper, cobalt, molybdenum and silver in Chile, in Congo Dem. Rep. of, in Indonesia and in Peru, develops copper in Congo Dem. Rep. of, and holds various exploration projects in Chile. Its main assets in production are CANDELARIA, EL ABRA, HENDERSON, CHINO - MILL and OJOS DEL SALADO in Chile, GRASBERG, SIERRITA and BAGDAD in Indonesia, TENKE FUNGURUME, TYRONE, MIAMI - ROM LEACH, MORENCI - MILL, MORENCI and MORENCI - ROM LEACH in Congo Dem. Rep. of and CERRO VERDE in Peru, its main asset in development is SAFFORD in Congo Dem. Rep. of and its main exploration properties are CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH, CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, BAGDAD - ROM LEACH, CHINO - ROM LEACH and CLIMAX in Chile. Freeport McMoran is listed in Germany and in United States of America. Its market capitalisation is US$ 72.1 billions as of today (€ 63.2 billions). Its stock quote reached its lowest recent point on March 06, 2020 at US$ 10.00, and its highest recent level on April 17, 2024 at US$ 49.82. Freeport McMoran has 1 448 000 000 shares outstanding. |