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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Southern Copper Corporation (XNYS:SCCO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SCCO
Name:
SOUTHERN COPPER CORPORATION (XNYS:SCCO)
Sector:
615.50M
Industry:
Copper
CEO:
Mr. Oscar Gonzalez Rocha
Total Employees:
14,700
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 SOUTHERN COPPER CORPORATION(SCCO) 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 ($) :
45.69
One Month Price Target:
$45.98
Six Month Price Target :
$47.44
Likely Price in One Year's Time:
Ticker:
$49.2
Likely Trading Range Today Under (Normal Volatility)
$45.51
Price Upper limit ($) :
$45.92
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$43.25
This week:
$40.23
This month :
$34.77
Other Primary facts
Market Cap:
34.89B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
773.09M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.92%
-15.7%
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:
$57.02
$51.82
$34.36
$39.56
Medium risk (<10%) entry points
Buy Call
Sell Call
$50.12
Buy Put:
Sell Put:
$49.01
$41.24
$42.37
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SCCO
Sharpe Ratio:
1.64%
Comparison:
SCCO, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -48.16% lower than the industry
& is -27.91% lower than the market/S&P 500 average
Average Returns/Yield of
SCCO
Daily returns:
0.05%
Weekly returns:
0.26%
Monthly returns:
1.04%
Yearly returns:
28.45%
Comparison of returns:
Average annual returns/yield (last 3 years) is -56.11% below industry average
Classification:
SCCO, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.72
Statistical test of Returns:
SCCO has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.63%
Weekly Volatility:
5.88%
Monthly Volatility:
11.75%
Yearly Volatility:
40.71%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.38%
Volatility in last five trading days has been -9.26% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.35%
Weekly VaR:
-11.95%
Monthly VaR:
-23.90%
How Much Can the price of
SCCO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-82.81%
This translates to price declining to:
$36.30
This translates to price declining to:
$7.86
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
SCCO is a 68.71% riskier investment compared to the market/S&P 500 & is 44.54% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -17.63% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SCCO
Beta in relation to market/S&P 500--1.14
Expected beta in 1 year's time:
0.782
Expected beta in 3 year's time:
1.105
Unlevered (debt free) Beta:
0.757
Beta in relation to Nasdaq (XNAS):
0.806
Beta in relation to all global stocks::
0.758
Beta Comparison & Analysis
Beta of competitors/peers::
1.098
Beta is 3.97% higher than peers
Average Industry Beta:
1.576
Beta is -27.53% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
7.75%
Sustainable growth rate is -58.82% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.015
Alpha is -89.56% below industry average alpha yield
Alpha is 96% compared to market & is healthy
Analysis of Cost of Capital of
SCCO
Equity cost of capital:
0.110
Equity cost of capital is -21.31% below industry mean WACC
Unlevered (without debt) cost of capital:
7.27%
Before-tax cost of debt:
4.82%
After-tax cost of debt:
3.81%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.81%
WACC is -28.87% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$14.44
Revenue growth rate per share of (3Y):
4.33
Annual revenue growth rate is 44.02% above the industry average
EPS:
$4.42
Expected Annual growth rate of EPS (3Y):
31.74%
Expected future EPS growth rate is 0.00% lower than the Copper industry
Free cash flow (FCF) per share:
$4.46
Balance sheet equity growth per share: 128.54%
Equity growth rate per share is 44.13% higher than the industry
Debt per share
$9.15
EBITDA per share
$10.14
Valuation Analysis Today of
SCCO
P/E Ratio:
12.11
P/E Ratio of Competitors/Peers:
25.26
P/E ratio is -52.07% lower than main peers & is -19.13% lower than the industry
Stock price/value with industry average P/E ratio: $66.17
SCCO is -30.95% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.16
Price to sales ratio is -15.42% below the industry mean
P/B (Price to book value ratio):
4.33
Price to free cash flow: 10.25
FALSE
Net income growth rate (3Y):
120.13%
Net income growth rate is 30.99% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 22.62%
Dividend yeild: 9.08%
Previous Dividend: $1.25
Previous adjusted dividend: $1.25
Previous Dividend: $4.15
Expected next dividend best case: $1.52
Expected next dividend worst case: $0.98
Average dividend payment (long-term): $0.67
Average dividend increase/decrease (growth rate) % per period: 17.63%
Expected next dividend payment date: 29/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 27/07/2022
Previous dividend payment date: 31/05/2022
Previous dividend record date: 17/05/2022
Previous dividend declaration date: 28/04/2022
Dividend History:
2022-05-16--$1.25
2021-11-09--$1.00
2021-05-10--$0.70
2022-02-14--$1.00
2021-08-11--$0.90
2021-02-09--$0.60
Dividend growth rate is -92.39% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
86.69%
Net debt to equity ratio:
55.48%
Debt to assets ratio:
39.53%
Net debt to assets ratio:
25.29%
Debt-to-asset ratio is -26.26% below industry average
Ability to repay debt:
Interest coverage ratio:
22.07
Interest coverage ratio is 43.55% more than industry average
Looking forward:
Debt growth rate:
-1.77%
Annual debt growth is 126% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.634
Statistical significance of correlation:
SCCO has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.645
Stock price is -1.78% less 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):
0.001
Covariance of price movement with the market:
0.001
Kurtosis
3.518
Returns have moderate 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:
-0.256
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
SCCO
Gross Profit Margin Ratio:
235%
Operating Profit Margin Ratio:
55.38%
Operating profit margin is 121.89% higher than the industry
Net Profit Margin Ratio:
235%
Effective Tax Rate:
41.24%
Effective tax rate is 17.20% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
41.88%
Return on equity (ROE) is 8.58% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
19.10%
Return on assets (ROA) is 38.72% higher than the industry
Financial Leverage:
1.7x
Current Ratio:
3.34
Current ratio is 27.44% above industry average
Cash Conversion Cycle (days):
21
Cash conversion cycle is -69.38% below industry average
The remaining useful life of property plant & equipment is: 5.0 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
759.6K
Each employee generates -13% less revenue than industry average revenue per employee
EBITDA generated per employee:
533.3K
Each employee generates 12% more EBITDA than industry average revenue per employee
Profit generated per employee:
232.5K
Each employee generates 6% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
41.9K
Each employee generates 3% more free cash flow than industry average revenue per employee
Assets/Capital per employee
825.2K
Each employee generates 3% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SCCO
NEWMONT CORPORATION (XNYS:NEM)
Dow Inc. (XNYS:DOW)
DuPont de Nemours, Inc. (XNYS:DD)
PPG INDUSTRIES, INC. (XNYS:PPG)
Nutrien Ltd. (XNYS:NTR)
FREEPORT-MCMORAN INC. (XNYS:FCX)
INTERNATIONAL FLAVORS & FRAGRANCES INC. (XNYS:IFF)
CORTEVA, INC. (XNYS:CTVA)
ECOLAB INC. (XNYS:ECL)
Current Analyst Ratings
Strong buy�0%
Buy�8%
Hold�21%
Sell�17%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
11.17B
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:
4.61B
6.55B
-
-
125.30M
-
37.00M
162.30M
9.40M
355.30M
1.66B
7.84B
6.18B
3.42B
5.83B
2.40B
3.42B
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
43.70M
Stock Based Compensation :
-
Change in Working Capital :
- 271400.00K
Accounts Receivables:
172.90M
Other Working Capital:
122.20M
Other Non-Cash Items:
260.60M
Net Cash Provided by Operating Activities:
820.70M
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
2.85B
406.50M
3.25B
1.26B
1.03B
229.70M
5.77B
10.39B
-
136.80M
-
298.60M
1.30B
12.13B
-
17.90B
693.70M
299.80M
237.00M
-
732.30M
1.73B
7.07B
732.70M
7.95B
15.96B
9.74B
3.48B
784.70M
-
3.90B
March 31, 2022 at 6:00:00 AM
4.98B
8.16B
17.90B
-
7.37B
4.5B
-
- 124900.00K
- 124900.00K
-
-
-
- 773100.00K
- 1700.00K
- 774800.00K
- 75800.00K
- 154800.00K
2.85B
3.00B
820.70M
- 205200.00K
615.50M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
SCCO
2023
2024
2025
2026
2027
$49.45
$91.68
$98.72
$106.30
$114.45