Why Freeport-McMoRan Copper and Gold (FCX) Stock Is Climbing This Afternoon

NEW YORK (TheStreet) -- Shares of Freeport-McMoRan Copper and Gold Inc. (FCX) are higher by 2.52% to $35.74 in early afternoon trading on Monday due to Friday's announcement the company has completed the sale of its Eagle Ford Shale assets to a subsidiary of Encana Corp. (ECA) for $3.1 billion.

Freeport-McMoRan is a U.S.-based international mining company, and the largest publically traded copper producer in the world.

The company also announced that it expects to complete the acquisition of interests in the Deepwater Gulf of Mexico from Apache Corp. (APA) for $1.4 billion, on June 30.

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Separately, TheStreet Ratings team rates FREEPORT-MCMORAN COP&GOLD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate FREEPORT-MCMORAN COP&GOLD (FCX) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FCX's revenue growth has slightly outpaced the industry average of 4.5%. Since the same quarter one year prior, revenues slightly increased by 8.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Metals & Mining industry and the overall market, FREEPORT-MCMORAN COP&GOLD's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has decreased by 21.3% when compared to the same quarter one year ago, dropping from $648.00 million to $510.00 million.
  • You can view the full analysis from the report here: FCX Ratings Report
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