" Look at FCX the past 20 years. People love this at peak earnings and hate it at trough earnings. That's exactly the wrong way to invest in a cyclical business."
Probably one of the most accurate comments i've seen on this board.
It takes risk to buy a company in the trough.
Hilarious watching them reluctantly shrug out a buy remark on this company now ...but 'be careful" lol
Ya, I think i can afford to be careful sitting on a 260% return from where you stooges said sell.
"what is this, a dash for trash"? Yea.. that's it you fool.
The Gulf assets might not get sold, but make no mistake. This company needs to de-lever. Grasberg 10-20% stakes will be sold for sure - which other assets is still a question mark. They need to get debt down under 15 billion.
Asset sales at anywhere near the Morenci valuation will be a positive, not at negative impact for share price. Shares are currently quite discounted due to high debt load and liquidity to service maturities.
They have to get that liquidity one way or another... and the market is running a discount for the possibility of either not being able to sell assets, or having to issue more shares. Asset sales will reduce that discount.
a lot of the reason fcx was down was bk fears, those are becoming alleviated every day copper stays even just where it is
If current oil and cu prices average out for the rest of the year.
EV is 33 bln. That's 5.5x EBITDA
In case anyone hasn't figure it out, that has been the fire in FCX's rocket. They sold a stake in Morenci, a minority stake of 13% at that, of 91mm ebitda for $1 billion.
that is 11x.
This disconnect became glaringly apparent on a Sunday evening at 1am EST (i remember the press release). Monday trading was closed for Washington holiday, and shorts got a whole 30hrs to stem over where the open was going to be. Stock closed that Friday at 5.53 just under the 50 day. On Tuesday it broke solid and it hasn't looked back since. To get 5.5x EV/EBITDA above, CU has to avg out at 2.30 for 2016. gold 1225. oil at 35-40. Even being lower at $4.5B EBITDA (vs 6), which is near $2.0x cu price guidance, you still have 7x EV/EBITDA. Going into an even lighter capex 2017. What supply is going to go online hard at $2 cu? What will that happen? where will supply be in 2017?
People sold all the way up from $5 on the same notion and are kicking themselves. See the big picture:
this thing is still down 80% in the last 5 years and 60% yoy.
you know the saying - cut your dogs early and let your winners ride.
Riding high since the $4's. In 2-5 years there might be another 4 out front.
Pretty Big Milestone day.
tomorrow. The last time this happened was almost a year ago north of $20.
What a long strange trip commodities have had. Looking more and more that this might be the last time the 20 sees the 100 until mid teens.. 300% return on the CB at that point, and Cramer pumping it then can deliver 70% of my shares to someone else :)
FCX comments from Javier Targhetta look like this could get interesting in 2017. Hard to see significant capacity additions in mid $2's copper. Production at existing mines will indeed keep lid on prices until attrition in production from decline of high grading assets. The decline will happen as companies are faced with less available grades the longer this continues. Seems like FCX offical knows this and sees the intersection in 2017.
Rally the troops! hahaha, good post as always Mullam
Made the same bet. Rotated most of my portfolio into this space in Dec/ Jan on FCX TCK BHP RIO, & ECA DVN X after DVN's earnings. I've been early in CLD - in last july, so part of the carbon bet was started too soon.
At this price for copper and oil, FCX can do almost 6 billion in EBITDA for 2016. Thats just over a 5x EV/EBITDA price on the enterprise. Will $2.25 copper hold? To be fair, FCX is predicting an increase in production this year. I know that in other instances, a lot of production is coming off line and inventories are below average levels. If CU price can hold 225 for the year, and with grasberg sale and maybe another sale or two by q2/q3 start, this company should be worth close to $20. Even with oil staying at $40.
Mullam, do you have any postion in TCK? which energy plays are you into if you don't mind me asking.
Good buy on WLL long... i debated them a few days ago as well on earnings. Earnings came out the same day as Unit's did. UNT dropped 30% at one point to the high three's.
I'm kicking myself there because i started a UNT position at 4.36 and sold it when it rebounded back to break even.. #$%$ haha
Yea long, think we see low to mid teens this year if they do grasberg for anywhere over 1.3 lbn, and copper stays over $2. No idea where oil goes next few months, but by years end with capex cuts already going for 2 years... it would be very hard to see oil still being around $30. CU i see staying over $2 on avg. Two months in at 2.19 today... could also just flatten out around the 2-2.10 range as it goes around this area for a while.. either way that is better than they guided for.
probably in the teens.
Grasberg coming next or something with RIO IMO. no need for equity just yet. If those sales take it back into the mid-teens, provided copper holds up above 2, another 100mm shares could be tapped. Between what they've announced so far, and these options, that should cover off $5 billion or so.
LOL. There have been people writing this "Out at x.xx, waiting for a pullback" .....all the way up from $4.
Guess what happened to that expected pullback?......
If you bought to hold, hold it. Sitting on nearly 80% gain myself. Leave the nickels and dimes for the trading trolls.
Having fun yet?
when will you gambling traders learn to quit tossing potatoes around for nickels and dimes and hold onto a good thing.
Here's a price announcement:
LONG Since $4.87 CB with several purchases in Dec and Jan.
Almost a 74% gain on my hands doing nothing. How much juggling have you done to get what, a couple points?? ......................
that was poetic :) I'm with you Mullam. Christmas came in January this year.
my big winners so far... also the largest holdings. CB in the 4's and 3's respectively.
CLD CB at high 2's (hurting, see what happens)
ECA just got in there. Beauty Qtr just released today, up 22% and green on it already.
DVN in at 19.90
BHP from just under 23
RIO @ high 23's.
See you around the corner mate