Southern Copper Corporation (SCCO): Today's Featured Basic Materials Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Southern Copper Corporation ( SCCO) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day down 0.9%. By the end of trading, Southern Copper Corporation fell 89 cents (-2.4%) to $37 on average volume. Throughout the day, 1.7 million shares of Southern Copper Corporation exchanged hands as compared to its average daily volume of 1.9 million shares. The stock ranged in price between $36.96-$37.89 after having opened the day at $37.84 as compared to the previous trading day's close of $37.89. Other companies within the Basic Materials sector that declined today were: Prospect Global Resources ( PGRX), down 36.1%, BMB Munai ( BMBM), down 17.2%, USEC ( USU), down 12.4%, and Kimber Resources ( KBX), down 11%.
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Southern Copper Corporation engages in mining, exploring, producing, smelting, and refining copper and other minerals in Peru, Mexico, and Chile. Southern Copper Corporation has a market cap of $31.89 billion and is part of the metals & mining industry. The company has a P/E ratio of 16.5, below the S&P 500 P/E ratio of 17.7. Shares are up 0.1% year to date as of the close of trading on Tuesday. Currently there are no analysts that rate Southern Copper Corporation a buy, three analysts rate it a sell, and five rate it a hold.

TheStreet Ratings rates Southern Copper Corporation as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, HyperDynamics Corporation ( HDY), up 8.9%, GeoPetro Resources Company ( GPR), up 8.3%, Cubic Energy ( QBC), up 6.9%, and Midstates Petroleum ( MPO), up 6.5%, were all gainers within the basic materials sector with Concho Resources ( CXO) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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