Analysts at Merrill Lynch predict copper prices will stay in the $3.40 to $3.80 per pound range from now through the end of 2013. (The current spot price is $3.40, down from $4.50 this past July). Based on this range Merrill Lynch's analysts think Freeport-McMoran's stock is quite undervalued. They figure the firm's mining assets are worth roughly $65 a share, and they have an overall price target of $57 a share (which is derived on a blended price-to-net-asset-value, price-to-cash-flow and price-to-earnings basis). That price is where the stock was earlier in the year, and reflects 45% upside from current levels.
PlatinumThe recent sharp drop in platinum, from $1,900 an ounce in mid-August to a recent $1,500 is a bit curious. Demand for the metal isn't really dependent on China, but instead is a key metal for the auto industry, which uses platinum in catalytic converters. Scarcity is the real driver here, as it is only mined in South Africa and Russia, and Russia has warned that its output will begin falling. Meanwhile, auto industry production is expected to rise the next few years.
If you're looking for a way to play the sector, then the ETFS Physical Platinum Fund (PPLT) is now at its lowest level since it was introduced in early 2010.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV