Freeport McMoRan Defines Its Cyclical Trough

John Robertson

PortfolioDirect

Our bottom of the cycle theme is playing out globally. In a late 1990s style market (the model for current resource sector equity market conditions), net outcomes will remain flat but trading opportunities around the mean will persist. Freeport McMoRan, the world’s largest listed copper producer, is two thirds below its peak 2011 price. Since the end of 2014, the company has traded broadly between $18 and $24. Copper market conditions will remain influential but the company value is likely to stay around the bottom of the cycle until there is more compelling evidence of an improvement in business conditions (i.e. a more sustainable and stronger recovery in copper prices than evidenced so far or a marked improvement in global growth momentum). The existing trading pattern suggests gains in the order of 33% from buying near the bottom of the trading band with a view to selling near the upper end of the range.


3 topics

John Robertson
John Robertson
PortfolioDirect

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment
Elf Footer