I've been keeping an eye on Freeport-McMoRan Inc. (NYSE:FCX) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe FCX has a lot to offer. Basically, it is a financially-sound company with a excellent growth outlook, not yet priced into the stock. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, read the full report on Freeport-McMoRan here.
Undervalued with reasonable growth potential
FCX is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of FCX's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, FCX's share price is trading below the group's average. This further reaffirms that FCX is potentially undervalued.
FCX's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that FCX manages its cash and cost levels well, which is a key determinant of the company’s health. FCX's has produced operating cash levels of 0.31x total debt over the past year, which implies that FCX's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Freeport-McMoRan, I've compiled three fundamental aspects you should further research:
- Historical Performance: What has FCX's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Dividend Income vs Capital Gains: Does FCX return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from FCX as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FCX? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.