Thursday, October 09, 2008

Freeport stock called "a generational buying opportunity"

The stock of Phoenix-based Freeport McMoRan has fallen from $126 per share in May to $39, creating what a report calls a "golden buying opportunity"

The story says The, and others are calling a "hideous decline" in the shares of Freeport-McMoRan "a generational buying opportunity." Note: I am NOT encouraging anyone to buy stock. I'm just passing along published reports. [right, Freeport's Arizona projects. From a presentation to the Denver Gold Forum on Sept. 10]

Freeport is the world's largest publicly-traded copper company and the world's largest molybdenum producer. It operates the giant Grasberg mine in Indonesia, considered the world's largest copper/gold mine. Freeport also plans to buy back more than 20 million shares of its stock by year end.

The low stock price relative to its mineral resources has prompted speculation that Freeport could be a takeover target.

Update (10-10-08, 12:20 pm): news reports of plummeting copper and other base metal prices have pushed down Freeport's stock price by 15% today. The analysts Canaccord Adams downgraded the stock from Buy to Sell and cut the price target to $33.

Copper fell to $2.497 on the London Metals Exchange and some expect it to fall further, to $2.26 or so in the first quarter of next year. Falling demand due to shrinking economies is a primary factor. Rising production costs are conspiring to cut into company margins, pushing stock prices down further. Reuters points to the high cost of sulfuric acid as a big factor.

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