Chinese Woes Send Freeport-McMoRan Inc (FCX) Shares Plummeting


Today has been a horrible day for shareholders of Freeport-McMoRan Inc (NYSE:FCX), as the stock has tumbled over 17%. This comes even with gold continuing to rise.

The fear for investors of Freeport-McMoRan Inc (NYSE:FCX), a company which produces both gold and copper, stands with the recent Chinese market woes. While the Chinese issues certainly are good for the price of gold, it’s the fact that China is by far the largest consumer of copper in the world, that is causing issues for the stock.

Investors realize that if Chinese manufacturing is to slow down, so will the demand for copper within the country. This could have a long lasting effect on companies like Freeport-McMoRan Inc (NYSE:FCX) who rely on a strong demand for copper to continue generating profits. This apparently is the main reason for today’s sell-off of FCX shares.

The stock is down 17.74% or $0.96, hitting $4.45 per share. About 74.59 million shares traded hands or 61.80% up from the average. FCX has declined 72.47% since June 5, 2015 and is downtrending. It has underperformed the S&P500 by 66.61%.

From a total of 11 analysts covering Freeport-McMoran Copper & Gold (NYSE:FCX) stock, 5 rate it a “Buy”, 1 a “Sell”, and 5 a “Hold”. This means that 45% of the ratings are positive. The highest target price is $25 while the lowest target price is $8. The mean of all analyst targets is $15.75 which is 253.93% above today’s ($4.45) stock price. Freeport-McMoran Copper & Gold was the topic of 24 analyst reports since July 28, 2015 according to the firm StockzIntelligence Inc. FBR Capital maintained shares on December 10 with a “Mkt Perform” rating. S&P Research upgraded shares to a”Hold” rating and a $12 target share price in their report from a September 1. Deutsche Bank downgraded FCX stock in a recent report from October 5 to a “Hold” rating. Citigroup downgraded the rating on September 1. Citigroup has a “Neutral” rating and a $12 price target on shares. Finally, Zacks upgraded the stock to a “Strong Sell” rating in a report they issued on a September 1.

The institutional sentiment increased to 1.03 in Q2 2015. It’s up 0.35, from 0.68 in 2015Q2. The ratio is positive, as 110 funds sold all their Freeport-McMoRan Inc shares they owned while 236 reduced their positions. 86 funds bought stakes while 270 increased their total positions. Institutions now own 872.60 million shares which is 20.85% more than the previous share count of 722.03 million in 2015Q2.

Northern Cross Llc holds 6.91% of its total portfolio in Freeport-McMoRan Inc, equating to 27.13 million shares. Stuyvesant Capital Management owns 270,124 shares representing 6.61% of their total US portfolio. Moreover, Long Oar Global Investors Llc has 5.59% of their total portfolio invested in the company, equating to 125,000 shares. The Washington-based Washington State Investment Board has a total of 3.8% of their portfolio invested in the stock. Pacific Heights Asset Management Llc, a California-based fund reported 4.58 million shares owned.

Freeport-McMoRan Inc. is a natural resource firm with an industry portfolio of mineral assets, oil and natural gas resources, and a production profile. The company has a market cap of $6.31 billion. FCX has organized its activities into six primary divisions: North America copper mines, South America mining, Indonesia mining, Africa mining, Molybdenum mines, and United States gas and oil operations. It currently has negative earnings. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, mining activities in North and South America, the Tenke Fungurume (Tenke) minerals district in the Democratic Republic of Congo (DRC) in Africa, and oil and natural gas assets in North America.