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This may prove to be the stock investment of the year: Freeport McMoRan Copper & Gold (FCX), and I'm obviously reiterating my buy rating for the company's shares, first recommended on March 23, 2009 at a price of $41.87. If you bought Freeport in March 2009, you're up more than 100%; if you missed the March 2009 entry point, fear not -- there's more ahead.
Simply, Freeport is in the catbird seat regarding two, key commodities: copper and gold. Freeport is the world's second largest copper producer. The global economic recovery is underway, and with it demand for key commodities, such as copper, will increase. China demand (copper pipes, electric wires), in particular, will help the copper market recover form the price bust associated with the earlier global recession. A likely rising price for gold and molybdenum provides two, additional tailwinds.
The First Call FY2009/FY2010 EPS estimates for FCX are $5.38 to $7.40. That $7.40 FY2010 EPS estimate will likely prove to be low.
Technically, Freeport's stock chart is strong -- a staircase -- one in which the stock rarely touches the key, 50-day moving average. However, FCX doe feature above-average volatility: Don't Buy FCX if you cannot tolerate a 10-15% price drop in a month -- it could happen. If you can, now would be a great time to scoop-up some FCX shares, as a recent pull-back to $84 has created a Buy opportunity.
2010 Outlook: Freeport is a long-term play, but if you're looking to sell FCX within the year, take your profits after it rises to $98-99, if it fails to rise above key, psychological resistance at $100.
Stock Analysis: Freeport McMoRan Copper & Gold is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in FCX now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your FCX position before March 2010. 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.
The First Call FY2009/FY2010 EPS estimates for FCX are $5.38 to $7.40. That $7.40 FY2010 EPS estimate will likely prove to be low.
Technically, Freeport's stock chart is strong -- a staircase -- one in which the stock rarely touches the key, 50-day moving average. However, FCX doe feature above-average volatility: Don't Buy FCX if you cannot tolerate a 10-15% price drop in a month -- it could happen. If you can, now would be a great time to scoop-up some FCX shares, as a recent pull-back to $84 has created a Buy opportunity.
2010 Outlook: Freeport is a long-term play, but if you're looking to sell FCX within the year, take your profits after it rises to $98-99, if it fails to rise above key, psychological resistance at $100.
Stock Analysis: Freeport McMoRan Copper & Gold is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in FCX now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your FCX position before March 2010. 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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