Freeport McMoRan: Back up the truck

High growth/modest risk plays don't appear too often, but Freeport McMoRan is one. Rising demand for copper and gold will likely lead to a 15-20% revenue gain for FCX in 2010: revenue growth could exceed that estimate if 2010 global GDP growth is better than 2.0%.

China demand (copper pipes, electric wires), in particular, will help the copper market recover from the price bust associate with the global recession. Further, Freeport, the second largest copper producer in the world, is well-positioned to benefit from ramping emerging market demand, overall. A rebound in the price of molybdenum will provide an additional modest tailwind. The First Call FY2009/FY2010 EPS estimates for FCX are $5.17 to $7.09.

Technically, Freeport's stock chart is strong: an uptrend, but one that also displays above-average volatility: $5-7 price swings in a week can occur. Hence, FCX is not for jittery investors, but if you're an experienced, calm investor, FCX is for you. Freeport is headed north.

Finally, the Sell/Stop Loss has been raised to $42, or to just above cost, from $32. Hence, this is a zero-risk trade for your March-bought shares.

%Proxy-Connection: keep-alive Cache-Control: max-age=0 Stock Analysis: Freeport McMoRan is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in FCX now; then buy another 50% in one month, if U.S. and global economic conditions don't worsen substantially. Revised Sell/Stop Loss if you were to buy shares in this company: $42.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

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