Why Freeport-McMoRan Copper & Gold (FCX) Stock Hit a 52-Week High Today

NEW YORK (TheStreet) -- Freeport-McMoRan Copper & Gold (FCX) hit a 52-week high of $38.90 Monday after agreeing to a memorandum of understanding with the Indonesian government on contract negotiations.

Shares of Freeport-McMoRan Copper & Gold were gaining 0.6% to $38.74 at 3:25 p.m.

The MoU, if it is approved, will bring Indonesia a step closer to resuming copper concentrate exports. Both the cabinet and outgoing President Susilo Bambang Yudhoyono will have to approve the MoU.

Copper concentrate exports halted in the course of a disagreement between the miner and the Indonesian government over rising export taxes and contract negotiations.

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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 solid stock price performance. 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 its closing price of one year ago, FCX's share price has jumped by 36.37%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 45.90% is the gross profit margin for FREEPORT-MCMORAN COP&GOLD which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 10.23% trails the industry average.
  • 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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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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