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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Freeport-Mcmoran Inc. (XNYS:FCX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FCX
Name:
FREEPORT-MCMORAN INC. (XNYS:FCX)
Sector:
968.00M
Industry:
Copper
CEO:
Mr. Richard Adkerson
Total Employees:
24,700
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 0.00% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FREEPORT-MCMORAN INC.(FCX) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND COPPER INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
28.3
One Month Price Target:
$28.62
Six Month Price Target :
$30.21
Likely Price in One Year's Time:
Ticker:
$32.12
Likely Trading Range Today Under (Normal Volatility)
$28.17
Price Upper limit ($) :
$28.53
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$26.17
This week:
$23.54
This month :
$18.78
Other Primary facts
Market Cap:
40.23B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.43B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
29.68%
-18.06%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$38.17
$33.56
$18.43
$23.04
Medium risk (<10%) entry points
Buy Call
Sell Call
$32.06
Buy Put:
Sell Put:
$31.08
$24.52
$25.52
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FCX
Sharpe Ratio:
4.70%
Comparison:
FCX, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 48.16% higher than the industry
& ratio is 106.03% higher than the market/S&P 500 average
Average Returns/Yield of
FCX
Daily returns:
0.19%
Weekly returns:
0.93%
Monthly returns:
3.70%
Yearly returns:
28.45%
Comparison of returns:
Average annual returns/yield (last 3 years) is 56.11% above industry average
Classification:
FCX, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.75
Statistical test of Returns:
FCX has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.75%
Weekly Volatility:
8.39%
Monthly Volatility:
16.78%
Yearly Volatility:
58.13%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
3.18%
Volatility in last five trading days has been -15.36% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.52%
Weekly VaR:
-16.82%
Monthly VaR:
-33.64%
How Much Can the price of
FCX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-28%
Worst case (decline):
>85%
This translates to price declining to:
$20.48
This translates to price declining to:
$4.25
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
FCX is a 137.42% riskier investment compared to the market/S&P 500 & is 103.39% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 17.63% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FCX
Beta in relation to market/S&P 500--2.01
Expected beta in 1 year's time:
1.125
Expected beta in 3 year's time:
1.592
Unlevered (debt free) Beta:
1.446
Beta in relation to Nasdaq (XNAS):
1.214
Beta in relation to all global stocks::
1.164
Beta Comparison & Analysis
Beta of competitors/peers::
0.999
Beta is 101.19% higher than peers
Average Industry Beta:
1.576
Beta is 27.53% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
29.88%
Sustainable growth rate is 58.82% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.275
Alpha is 89.56% above industry average alpha yield
Alpha is 1750% higher than market/& is unsustainably high
Analysis of Cost of Capital of
FCX
Equity cost of capital:
0.169
Equity cost of capital is 21.31% above industry mean WACC
Unlevered (without debt) cost of capital:
12.17%
Before-tax cost of debt:
6.07%
After-tax cost of debt:
4.80%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.80%
WACC is 28.87% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$17.21
Revenue growth rate per share of (3Y):
1.68
Annual revenue growth rate is -44.02% below industry average
EPS:
$3.45
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$4.03
Balance sheet equity growth per share: 49.82%
Equity growth rate per share is -44.13% lower than the industry
Debt per share
$5.78
EBITDA per share
$7.31
Valuation Analysis Today of
FCX
P/E Ratio:
8.57
P/E Ratio of Competitors/Peers:
20.94
P/E ratio is -59.09% lower than main peers & is -42.77% lower than the industry
Stock price/value with industry average P/E ratio: $51.65
FCX is -45.21% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.64
Price to sales ratio is -56.04% below the industry mean
P/B (Price to book value ratio):
1.68
Price to free cash flow: 7.02
-
Net income growth rate (3Y):
63.29%
Net income growth rate is -30.99% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 4.30%
Dividend yeild: 1.59%
Previous Dividend: $0.15
Previous adjusted dividend: $0.15
Previous Dividend: $0.45
Expected next dividend best case: $0.20
Expected next dividend worst case: $0.10
Average dividend payment (long-term): $0.09
Average dividend increase/decrease (growth rate) % per period: 25.00%
Expected next dividend payment date: 08/01/2022
Expected next dividend record date: 13/07/2022
-
Previous dividend payment date: 05/02/2022
Previous dividend record date: 14/04/2022
-
Dividend History:
2022-04-13--$0.15
2021-10-14--$0.08
2021-04-14--$0.08
2022-01-13--$0.08
2021-07-14--$0.08
2020-01-14--$0.05
Dividend growth rate is -89.21% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
55.54%
Net debt to equity ratio:
8.63%
Debt to assets ratio:
16.91%
Net debt to assets ratio:
2.63%
Debt-to-asset ratio is -68.46% below industry average
Ability to repay debt:
Interest coverage ratio:
17.89
Interest coverage ratio is 16.37% more than industry average
Looking forward:
Debt growth rate:
0.21%
Annual debt growth is -126% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.99%
Analysis of Key Statistics
Correlation of price movement with the market:
0.657
Statistical significance of correlation:
FCX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.645
Stock price is 1.78% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.645
Correlation of price movement with Nasdaq (^IXIC):
0.007
Covariance of price movement with the market:
0.016
Kurtosis
7.018
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.364
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
FCX
Gross Profit Margin Ratio:
164%
Operating Profit Margin Ratio:
39.20%
Operating profit margin is 57.07% higher than the industry
Net Profit Margin Ratio:
164%
Effective Tax Rate:
29.86%
Effective tax rate is -15.13% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
34.41%
Return on equity (ROE) is -10.80% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.47%
Return on assets (ROA) is -23.91% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
2.37
Current ratio is -9.60% below industry average
Cash Conversion Cycle (days):
-34.2
Cash conversion cycle is -150.03% below industry average
The remaining useful life of property plant & equipment is: 2.8 years
Stock based compensation to net income ratio:
0.96%
In-depth Efficiency Analysis
Revenue generated per employee:
995.9K
Each employee generates 13% more revenue than industry average revenue per employee
EBITDA generated per employee:
423.0K
Each employee generates -12% less EBITDA than industry average revenue per employee
Profit generated per employee:
207.1K
Each employee generates -6% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
39.2K
Each employee generates -3% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.4M
Each employee generates -3% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
FCX
ECOLAB INC. (XNYS:ECL)
AIR PRODUCTS AND CHEMICALS, INC. (XNYS:APD)
Vale SA (XNYS:VALE)
NEWMONT CORPORATION (XNYS:NEM)
Dow Inc. (XNYS:DOW)
DuPont de Nemours, Inc. (XNYS:DD)
CRH PUBLIC LIMITED COMPANY (XNYS:CRH)
PPG INDUSTRIES, INC. (XNYS:PPG)
Nutrien Ltd. (XNYS:NTR)
Current Analyst Ratings
Strong buy�8%
Buy�21%
Hold�50%
Sell�17%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
24.60B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
14.46B
10.14B
-
-
398.00M
-
174.00M
572.00M
-
584.00M
2.07B
10.45B
9.64B
5.12B
8.97B
2.68B
5.12B
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
48.00M
Stock Based Compensation :
49.00M
Change in Working Capital :
- 811000.00K
Accounts Receivables:
- 222000.00K
Other Working Capital:
-
Other Non-Cash Items:
501.00M
Net Cash Provided by Operating Activities:
1.69B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
8.34B
-
8.34B
1.98B
4.45B
529.00M
15.30B
30.71B
-
-
-
-
2.82B
33.53B
-
48.83B
3.16B
1.37B
1.39B
-
1.93B
6.45B
8.26B
5.80B
18.34B
-
24.79B
161.00M
- 5848000.00K
- 387000.0K
-
March 31, 2022 at 6:00:00 AM
15.04B
14.87B
39.66B
-
9.62B
1.3B
-
- 714000.00K
- 714000.00K
- 434000.00K
-
- 541000.00K
- 220000.00K
492.00M
- 703000.00K
-
274.00M
8.59B
8.31B
1.69B
- 723000.00K
968.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
FCX
2023
2024
2025
2026
2027
$32.28
$51.68
$58.66
$66.58
$75.57