| 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 $24.15) is bearish. Under those conditions, it is tough to justify taking heavy long positions in the company's stock. Perhaps if the most bearish technical scenario plays out, both the fundamental, valuation and technical bulls will all jump aboard the FCX bandwagon in unison.
See more from Benzinga © 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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Freeport McMoRan Copper and Gold Inc.
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PRODUCTEUR |
CODE : FCX |
ISIN : US35671D8570 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Freeport McMoran est une société de production minière d'or et de cuivre basée aux Etats-Unis D'Amerique. Freeport McMoran est productrice d'or, de cuivre, d'argent, de cobalt et de molybdène au Chili, au Perou, en Indonesie et en Republique Democratique Du Congo, en développement de projets de cuivre au Perou, et détient divers projets d'exploration au Chili. Ses principaux projets en production sont CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI et MORENCI - ROM LEACH au Chili, GRASBERG, SIERRITA et BAGDAD en Indonesie, TENKE FUNGURUME et TYRONE en Republique Democratique Du Congo et CERRO VERDE au Perou, son principal projet en développement est SAFFORD au Perou et ses principaux projets en exploration sont BAGDAD - ROM LEACH et CHINO - ROM LEACH au Perou et CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH et CLIMAX au Chili. Freeport McMoran est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 69,0 milliards US$ (64,4 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2020 à 10,00 US$, et son plus haut niveau récent le 24 avril 2024 à 47,63 US$. Freeport McMoran possède 1 448 000 000 actions en circulation. |