it could, if FCX would come out with a game changing day. Better numbers, better forecast, sale announcement of assets, etc. There is a lot of possible big news riding on this 1st quarter report. And of course it could all come out as boring as meeting plan --- but that seems unlikely to me. Commodities are volatile, FCX is at multi year lows, other miners are suffering, capacity is being cut, demand is holding firm --- the die is cast for a breakout at some point this year, whether its this 90 day period or a later one this year, things are going to change because the way the game is played is changing.
Yes, a big upside day with will vaporize current shorts, and if the market is purely long then shorts will have to suffer exiting at inflated prices. 50/50 is a good bet for this to happen. I seriously doubt management would have exited 2014 with more issues to carry in to the new year. So, with everything now on the table, its time to show the cards ---- I am hoping management held an ace up their sleeves this time.
Lucius should be 20,000 barrels a day for FCX. The dividend drop was shocking. Hammers and scammers. I'm ham. Good luck.
good post. interesting to hear the same theme over and over again from the major players in the space. Copper is getting harder and harder to find. And with global demand poised to rise from its current 20 MM MT its seems straight forward that a rebalancing of the price model is inevitable. Much like that of oil.
The day to day ranters on this board, and wow there are a lot of them, don't want to consider the big picture -- which is clear with the exception of the political events that distort facts abruptly. Future copper supplies are going to be short of future copper demand
all true, mine is nothing more than an educated hunch --- but, being in the global commodity business, FCX will react to more than just the US market. Europe is starting to show signs of life. Much of Asia is doing well -- to some extent at Chinas expense, but there are real pockets of strength there. INdia is going very strong and much of that is on the back of infrastructure demand.
Too, I have to believe that FCX went ahead and sucked it up in the year end call with all the bad news that was out there. No sense dragging things on when you can do it all at once. THe Dividend cut was frankly anticipated though the amount was surprising -- but it was also decisive. My sense is that we were all prepared to deal with a more dire scenario that didn't play out. Witness commodity prices above plan as well as new and productive volumes from 3 new wells. FInally -- there has been no bad news --- Indonesia was a daily headline headache last year --- and now the relief of silence.
I could be wrong, so Im not selling my hunch here, but mine is that this will be a good quarter for my reasons sited. I also believe that oil will be going up and the markets will use that as a catalyst for new interest in commodities drawing new investment demand. I do see things looking up here
Also they downsized, so it may help in the short term, but reduces revenue as production will be down. Also mamnagment said they are taking steps to insure long term value for shareholders. That could mean some tough near term choices that wall st wont like. So its 50/50 on this one.
Im thinking of buying $22 calls a few mountgs out, if this goes past 30 ill still ake a few buck, and giving it plenty of time to do it. The question for me isnt if, but when. Hoping for a slightly negative reaction 1 more time, then im hopping on the train
I sild for earnings, this is 50/50 could go either way. Only reason is, i expect poor earnings, oild did go to 45 too. And even if fcx provides earnings average consensus of .05 a share, the stock could still get hammered if its revenue will be down y/y.
Plus the latest core inflation number's took a little jump, which might feed positive into the metal's equation soon. Although at the same time it increases the odd's of a little qtr point bump up in June. Like yourself '44 I also believe the worst of the correction is over for FCX. After watching the bad tape action on Friday though I'm wondering just how enthusiastic buyer's will be, even on modestly better earning's/CC new's if the S&P is going south in a convincing way ? Maybe the institution's will goose the dog enough to get some short covering going & a nice little pop. Nothing impresses the fan's more than a rising stock in a hard down
The reality is though when the general market get's hammered hard the vast majority of stock's go along for the ride,.... baby out with the bath water rule. The only thing I feel somewhat comfortable with right now is we will probably see a 1.5-2 point swing, maybe in both direction's from here by the end of next week ! Good post but it could be a long 3 day's !
90 days ago FCX took major write downs (impairment charges) to mark their assets to market prices. And they recalculated the future based on those numbers. For our recollection:
1) Oil (Brent ) was repriced at $50 now $63
2) Copper - was repriced at $2.60 now $2.80
3) Gold - was repriced at $1300 now $1200
the net of these latest numbers equates to (annualized)
1) $300 MM
2) $630 MM
3) - $80 MM
net additional cash flow from 90 days ago: + $850 MM annualized
new production from Holstein, HIghlander, and Luscious will have a fresh 90 days of cash flows that weren't on the books prior as well. The future prospects of all of these commodities is positive at differing points on the time line, but positive none the less. The bottom is behind FCX. I am gambling on a beat next week and am gambling that guidance ticks up and am betting that the market responds favorably to this. It is without a doubt the most beaten up of the miners for a variety of reasons and the market is waiting for any reason to elevate this back to a more normalized price in the mid $20's.
The swift rise from $17 to $20+ with the rise in oil is an indication of how quickly the market is ready to revalue FCX on any positive news. It is simply too cheap for the quality of its asset base
To start with paul, all stock's are not created equal when it comes to evaluating squeeze potential. Some experience will give you a rough guide to start with but nothing beat's trading an individual stock for at least a couple year's to be able to indentify the extreme's. One other obstacle is the delay in reporting, unless of course you want to subscribe to a service with a monthly fee! I believe the freebies are published a couple times a month...the problem is a LOT can happen in two week's when large trading desk's are active.
While I look at % of float short & number of shares short, I rely more on D.T.C. [day's to cover] as a general guide. Right now FCX has about 2.3 DTC, in my experience hardly extreme. Enough for a couple point pop but not close to a moon shot. Keep in mind this is based on a trailing avg. vol too.....which during a basing period for example with falling vol., can exaggerate the DTC number.
To answer your question in general term's, YES a 20-30% short number is VERY extreme, as are most stock's with a 10+ DTC number. Keep in mind a few other important factor's too. High Short int. can stay that way for extended period's of time, especially in a arbitrage situation. Also NEVER assume short's represent the dumb money in any situation, in fact assume just the opposite ! Generally speaking they are better connected to the co. , do more tech. homework, know the stock & the financial's better, & have MUCH deeper pocket's than retail. In some cases they are even ex-employee's who are VERY familiar with the co. & have a very good feel of where thing's are headed....especially financially if close to a CFO ! Bottom line, be VERY careful betting against any large short player's....period. In one instance a couple decades ago in a telcom stock it cost me over 60K to learn the lesson. Personally I just avoid trading stock's with sky high short number's, unless I feel pretty confident i'm playing against retail amatures.
Amateur! it's obviously a bait for shorts, you fall for this sort of things way too many times! Has the article "revealed" any new facts? Look no other than the actual price action, that's where everyone bets their wallets. Does the price action justify your short position? If you're so sure about FCX will fall below 18.50, why do you stop at 40k? Why not short more?
Sentiment: Strong Buy
and i am not going to cover not 1 of my 40k shares short anything below or above 18.50.
the percentage of shares sold short is only 5.3% of float. That seems low doesn't it? I mean a heavily shorted stock should be around one third of the float, right? Paul
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Ethically - I missed all the money being shorted on this stock. J.B. hates bankers and shorts. They called it last year and congrats to them - fortunes were made. However, over the years I've seen this stock HAMMER shorts mercilesssly. Up to 25 next week. Copper is going up. Maybe Monday? Come on management - make some noise.
Sentiment: Strong Buy
JB, hope you've covered your short positions to limit your loss. You know lots of shorts are betting on a bad earning. The likes of GS, JPM know that better than anyone else, they'll squeeze you folks really hard. The remarkable resilience in a huge down market should give everybody enough of a clue, nice weekend
Sentiment: Strong Buy
How earning's [or lack of !] are received is the first big enchilada to watch short term. Oil & metal's, including PM's hanging in pretty good all considered, grade them neutral for the time being.
The second big enchilada to watch is the DXY We get an unpleasant WKND "greasy" event , & the dollar index pop's hard on a lower euro & comm. market's could get whacked with a little retrace action. And of course not be overlooked is the int. rate/bond market moves. With inflation rates today close the fed's target of 2% odd's of a june move increase !
How I missed today's new's of the bloomberg"terminal" problem I don't know but I did ! Read Art C. comment's !
You know what I worry most about though ? The lack of liquidity in the bond market's. How much is the fed prepared to step into the breach when there is a lack of bid's during a sell off....thank's to the recent bank reg's limiting trading activity? Miner's could enjoy some safe haven buying but most market's would probably be crushed ! I'm not terminally neg. on FCX BTW, just very cautious right now ! That's where watching the technical's comes into play....it keep's one objective !
You are right, i think q1 will have more negatives till positives, the real turn arround should start to happen q2 and on. Maybe there will be a suprise but ive made some money so im happy. Thanks.