SCCO fortunes do not depend on moly. It is enough that market/economy point to strong copper price for few next years. If moly price recovers in meantime then it's even better; it will be more fun to own this stock.
Company projections for 2014 are for 672 KTon copper and 21 KTon moly, i.e. it is about $5B in copper and $M in moly revenues (didn't check moly price for a while; assume it's about $10/lb now). Copper share is much higher. Moly price recovery would be vitally important for pure independent moly producers, if any are still alive. Even ole TC still shows some breathing exclusively because it started to produce some copper.
Weak earnings, lousy recent divident but we are up 3% today. What am I missing? Is this all based on the hope for Tia Maria or whatever the name of the proposed new mine that now seems to be getting the green light?
Weak earnings? I disagree. This company is solidly profitable at the point when copper price is still low. As world economy grows up, copper price will follow; it is still at the beginning of new bullish phase and, inevitably, SCCO will reap increasing benefits.
Last month jitters were caused by approaching Chinese New Year recess; it happens every year and it always creates talk about world crisis and economic malaise. Once Chinese numbers come back to normal, after holidays, copper price will resume recovery to high 3s, likely taking this stock to high 30s.
It is impossible to make correct numerical predictions for near-term. However, LME storage number already knocks in "300" border. It shows market trend. Investing in SCCO, the purest copper play, means now investing along market trend.
A BAD labor report along with weak SCCO earnings and a low dividend and SCCO closes up 5.2% for the day and the overall market is up big.
What are we missing? ....... I don't have a clue. All the moons were aligned for a bad day and what do we get ...... a big up.
It makes no sense in the real world but maybe, today's action doesn't reflect the real world. Pumpers, SCCO buying back today ..... I just don't know, but next week should be interesting and may provide some clues as to how realistic today's market action was.