Do not quit Freeport Mcmoran quite yet!


USD 30.51  0.27  0.88%   

While some baby boomers are getting worried about basic materials space, it is reasonable to break down Freeport-Mcmoran. We will evaluate if Freeport Mcmoran shares are reasonably priced going into July. Is the stock valuation justified? I am going to cover Freeport Mcmoran perspective on valuation to give you a better outlook on taking a position in it.
Published over three months ago
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This firm has 9.62 B in debt with debt to equity (D/E) ratio of 0.4, which is OK given its current industry classification. The company has a current ratio of 2.32, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. Debt can assist Freeport Mcmoran until it has trouble settling it off, either with new capital or with free cash flow. So, Freeport Mcmoran's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Freeport-Mcmoran sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Freeport to invest in growth at high rates of return. When we think about Freeport Mcmoran's use of debt, we should always consider it together with cash and equity.
Freeport Mcmoran advice module can be used to check and cross-verify current investment recommendation provided by analysts reviewing the company's potential to grow using all of fundamental, technical, data market data available at the time.
We determine the current worth of Freeport-Mcmoran using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Freeport-Mcmoran based exclusively on its fundamental and basic technical indicators. By analyzing Freeport Mcmoran's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Freeport Mcmoran's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Freeport Mcmoran. We calculate exposure to Freeport Mcmoran's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Freeport Mcmoran's related companies.

Freeport-Mcmoran Investment Alerts

Freeport investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Freeport-Mcmoran performance across your portfolios.Please check all investment alerts for Freeport

Freeport Mcmoran Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Freeport value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Freeport Mcmoran competition to find correlations between indicators driving the intrinsic value of Freeport.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Freeport Mcmoran, but it might be worth checking our own buy vs. sell analysis

Freeport Mcmoran exotic insider transaction detected

Legal trades by Freeport Mcmoran insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Freeport insider trading alert for general transaction of common stock by John Stephens, the corporate stakeholder, on 4th of October 2022. This event was filed by Freeportmcmoran Inc with SEC on 2022-10-04. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Is Freeport Mcmoran valued reasonably by the market?

Freeport-Mcmoran price slide over the last few months could raise concerns from investors as the firm is trading at a share price of 42.20 on 10,014,225 in volume. The company directors and management were not very successful in positioning the firm resources to exploit market volatility in May. However, diversifying your holdings with Freeport-Mcmoran or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 3.25. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Freeport Mcmoran partners.
 2019 2020 2021 2022 (projected)
Share Based Compensation63 M99 M98 M92.69 M
Net Cash Flow from Operations1.48 B3.02 B7.71 B8.32 B

Margins Breakdown

Freeport profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Freeport Mcmoran itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Freeport Mcmoran profit margins.
Operating Margin13.82
EBITDA Margin0.32
Gross Margin0.42
Profit Margin0.2

Freeport Mcmoran Average Assets is increasing over the last 8 years. Freeport Mcmoran Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 8 years. Additionally, Freeport Mcmoran Net Income Per Employee is fairly stable at the moment. Freeport Mcmoran Average Assets is increasing over the last 8 years. Freeport Mcmoran Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 8 years. Additionally, Freeport Mcmoran Net Income Per Employee is fairly stable at the moment.

Our take on today Freeport Mcmoran rise

Current coefficient of variation indicator falls down to -1816.53. Possible price jump? Freeport-Mcmoran exhibits very low volatility with skewness of -0.36 and kurtosis of 0.39. However, we advise investors to further study Freeport-Mcmoran technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Freeport Mcmoran's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Freeport Mcmoran's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Freeport Mcmoran Implied Volatility

Freeport Mcmoran's implied volatility exposes the market's sentiment of Freeport-Mcmoran stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Freeport Mcmoran's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Freeport Mcmoran stock will not fluctuate a lot when Freeport Mcmoran's options are near their expiration.

Our Final Takeaway

While some firms under the copper industry are still a bit expensive, Freeport Mcmoran may offer a potential longer-term growth to investors. To conclude, as of the 11th of June 2022, we believe Freeport Mcmoran is currently overvalued. It responds to the market and projects very low probability of bankruptcy in the next two years. Our final 90 days buy-sell recommendation on the company is Hold.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Freeport-Mcmoran. Please refer to our Terms of Use for any information regarding our disclosure principles.

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