FCX Stock Analysis: Trump influences Copper

BlairThe article was written by Blair Goldenberg, a Financial Analyst at I Know First, and enrolled in a Masters of Finance at Colorado State University.

FCX Stock Analysis: Trump influences Copper


  • Background on FCX
  • FCX Stock Analysis
  • Analysts Recommendations
  • I Know First Prediction

Background on FCX

fcx stock analysis

Freeport-McMoRan Inc. (FCX) is a natural resources company with headquarters in Phoenix, Arizona. FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold, molybdenum, oil and natural gas. FCX is the world’s largest publicly traded copper producer, the world’s largest producer of molybdenum, and a significant gold, oil and natural gas producer.

FCX Stock Analysis

FCX stock stands at $16.00 per share, with a loss of 1.23% or $0.20 per share from its previous close on Wednesday November 23, 2016 of $16.20.


FCX shares went up following an attempt to lower their debt. The strategy was announced in July and since then, FCX has been able to raise $1.5 billion in gross proceeds by selling 116.5 million shares at about $13 per share. They also sold $6.6 billion in assets, containing its high-quality assets. FCX was also able to developing free cash flow. FCX also closed on the sale of the 70% stake it had in TF Holdings Limited to and transferred it to China Molybdenum Co., Ltd., which generated $2.65 billion in cash. The cash from the transfer will be used to pay even more of their debt. In a year, FCX has reduced its debt by 12%.

On October 25th, FCX released its earnings for Q3 and reported a ($0.06) of Reuter’s estimate at $0.19 increase per share, leaving it at $0.13 gain per share. Revenue stood at$3.88 billion for the quarter, as compared to the estimate of $3.95 billion. Their net margin was at (58.67%) and they had a negative return on equity of 0.72%. However, the revenue for this quarter was up 14.6% from last year’s Q3 earnings. During the same period last year, the company posted ($0.15) earnings per share.

FCX stock analysis

In the last month, FCX had a steady increase in stock price from the beginning of the month and a sudden jump around November 18, 2016. Copper is the big ticket item for FCX and therefore is more influenced in the market when copper prices go up or down. Last Friday, copper prices rose to a 17-month high due to possible demand in the future. The demand for copper is partly influenced by the Trump policies of increasing infrastructure in the United States. However, the share price won’t reflect this change until about 2018. However, the best time to invest is when the shares are at their lows. FCX is only at $16.00 per share currently, in 2018, the demand from the new policy may end up boosting share prices. Copper in general went up 2.48% between November 20-23, 2016, this may be a glimpse into the future of copper sales.

Analysts Recommendations

Analysts from Cowen and Company and Deutsche Bank have been bullish about FCX recently and specifically, Anthony Rizzuto, has continually reiterated his strong position on FCX. The fact that FCX has been trying to lower its debt recently, makes it very attractive for shareholders and investors. As of now, Rizzuto is giving FCX an “outperform” rating. FCX is back to being the “go-to copper investment vehicle.” Yahoo Finance, however, is giving FCX a hold rating as seen below.


When a company begins to pay of its debts, the share price tends to move in a positive way. Although FCX still has $18 billion in debt, the reduction of 12% in the last year is a huge difference and is a huge selling point. The company is committed to reducing long standing debt that they have accrued in their lifetime. As long as copper prices continue to show favorable prices and the debt continues to be paid off, FCX will continue to be the go-to copper manufacturer in the country.

I Know First Prediction

The I Know First algorithm identifies waves in the stock market to forecast its trajectory. Every day the algorithm analyzes raw data to generate an updated forecast for each market. Each forecast includes 2 indicators: signal and predictability. Currently, I Know First’s self-learning algorithm maintains a bullish forecast on FCX, in accordance with the above analysis.



The I Know First algorithm predicted an increase in FCX on November 17, 2016, in a week, the stock was up 17.46%.

From February 23rd, 2016 to May 23rd, 2016, FCX jumped 43.51% in only three months, creating a quick win by the algorithm. The algorithm has continuously predicted the strength and growth of FCX and will continue in the future.

How to interpret this diagram:

Algorithmic Stock Forecast

The table on the left is a stock forecast produced by I Know First’s algorithm. Each day, subscribers receive forecasts for six different time horizons. Note that the top ten stocks in the 1-month forecast may be different than those in the 1-year forecast. In the included table, only the relevant tickers have been included. The boxes are arranged according to their respective signal and predictability values (see below for detailed definitions). A green box represents a positive forecast, suggesting a long position, while a red represents a negative forecast, suggesting a short position.


This indicator represents the predicted movement/trend of the asset; not a percentage or specific target price. The signal strength indicates how much the current price deviates from what the system considers an equilibrium or “fair” price.

Predictability (P)

This value is obtained by calculating the average correlation coefficient between the past predictions and the actual asset movement for three discrete time periods. The averaging gives more weight to more recent performances. As the machine keeps learning, the values of P generally increase.