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$18.05 -3.77 (-17.28%)
12/3/2008 4:00 PM

Freeport-McMoRan Copper & Gold, Inc. (FCX)

CAPS Rating:
*****

Through its subsidiaries, the Company engages in the exploration, mining, and production of copper, gold, and silver. It also smelts and refines copper concentrates, and markets the refined copper products.

View All Commentary (FCX)

Recs

5

Avatar UPTschack (78.36) Submitted: 3/12/07 12:14 AM : Outperform Start Price: $59.09 FCX Score: -29.53

It says something about management when they buy a company thats 3 times the size of their own. They know something we don't about future copper prices. Unlike PD, FCX will not put a ceiling on copper prices. This purchase will give them the leverage they need to increase and control prices. FCX forcasts paying off two thirds of the debt, acquired from their purchase of PD, by 2009. Their current book value is $12. Add 11.9 billion in equity by 2009 (2/3 of PD purchase), adjust the 136 million share dilution from the business combination. Thats a book value of $43 by 2009(triple the current book value). Don't forget the nice dividend, currently around 8%.

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