Benzinga Staff Writer
Copper has been on a nice uptrend recently, and it recently just broke out on the daily chart.
Copper is so important because it is used in everything, from housing
to industry to automobiles to electronics. Hence why economists have
given it the nickname, “Dr. Copper.” Excluding earlier this year, copper
is the highest it’s been in years, and it looks poised to break the
$4.50 per pound mark, which can potentially lead to $5 copper, something
we have never seen.
As such, the related equities and ETFs are moving with it. Names like Freeport-McMoRan Copper & Gold (NYSE: FCX), and the iPath Dow Jones-UBS Copper Subindex Total Return ETN (NYSE: JJC [FREE Stock Trend Analysis]) are both sharply higher today, up 4.5% and 2.5%, respectively.
Freeport is generally the most common barometer of copper and
industrial use amongst commodity related equities, as the company is the
world’s largest seller of copper.
With shares trade at under 9 times forward earnings, and sporting a
1.9% dividend yield at these levels, it looks as if copper, and thus,
Freeport-McMoRan Copper & Gold is not overvalued by any stretch of
the word.
The company trades at 0.7 times earnings growth, although miners tend
to trade below market multiples, as analysts are generally skeptical of
the commodity bull cycle, and have been for some years.
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