David Mamos
David'S LATEST HEADLINES
-
Buy Sell or Hold: Now is the Time to Buy Freeport-McMoRan
Historically, when investors wanted to gain some exposure to copper in their portfolios, the stock to buy was always Freeport-McMoRan Copper and Gold Inc. (NYSE: FCX).
That's still true today, but with one major difference: When you buy Freeport-McMoRan you're also buying a stake in oil and gas exploration and production.
The company recently acquired McMoRan Exploration Co. (NYSE: MMR) and Plains Exploration & Production Company (NYSE: PXP) – both of which are aggressively producing oil and natural gas through on-shore and off-shore properties in the Gulf of Mexico, California and throughout North America.
This merger is expected to shift Freeport-McMoRan's operations from being a 100% mining outfit to a company with a 75% mining segment and a 25% oil-and-gas segment. This potentially gives the mining giant top-line diversification in the event copper prices begin to weaken.
And while news of these acquisitions did cause the stock to fall 16% in a day, the company has regained some of its mojo – gaining 10.6% since Dec. 6th.
The stock rallied yesterday when the company reported Q4 2012 earnings of $0.78 EPS, which beat consensus analyst estimates of $0.72 EPS. That gain represented a 7.46% increase over the same period a year ago when the company reported $0.67 EPS.
So does that make Freeport-McMoRan a solid buy candidate for 2013?…
Let's take a look, starting with its mainstay: copper demand.
- Buy Sell or Hold: Will Ford Outperform the Market In 2013?