Stockchase Insights Capstone Copper Corp CS-T HOLD Oct 27, 2023

The company is not too big, not too small, in a sweet spot. The copper price has pulled back a little, but has seen a great run-up. Supply has declined while demand is rising from places like EVs. The copper fundamentals look great.

Long-term, the story hasn't changed: there will still be supply constraints that won't meet growing demand from EVs and the electricity grid. This, like mid-sized copper miners--are possible takeover targets.

Fundamentally 6/10, value of 1/10. Hit her target, but analysts still see about 40% upside. Doesn't own, likes copper space, but she'd use an ETF. Seeing a pop in materials, especially today. Volatile. If you own, ride it a bit longer and then take profits.

We recently added more CS to our model portfolio and consider it a buy. We are not fond of targets, especially short term, but $13 to $14 we think is possible. 
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If you want a name with a bit more torque. Great properties in South America.

Insider selling is never a 'great' sign but there can be lots of reasons for it. Insiders still own more than $200M in stock. We can also live with a bit of insider selling on a stock that has risen 41% in the past year. The future will likely still be dictated more by copper prices than any trading activity. EPS is expected to more than triple in 2025. If CS can achieve this growth, the stock should do well. 
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Emerging play in South America. Not the quality asset of a FCX, but it is safer. He's not a mining expert, but thinks there's some money to be made here.

Will grow 30% in 2025 due to continued growth in core asset. FCF becomes an inflection point in 2025. Bit of geopolitical risk in Chile. Looking for a partner for its next major project to drive growth from 2030 on.

Likes it for a project in Chile that will combine several properties. Also a property in Arizona that could come on, and should be very economic. The tariffs won't matter, because AI will consume every piece of copper that we can find.

Copper is one of the reasons he thinks we're starting a new cycle. Both silver and copper have broken out to new highs; both have industrial uses and should benefit from a strengthening economy. If cyclical commodities are breaking out to new highs, then copper should continue to work into 2027. 

His firm's fundamental analyst has it rated Outperform. On the chart, you can see the 4-year cycle reset in 2022 as well as the cycle reset in April 2025. If he's correct that we're starting a new cycle, this name should have similar upside to the last one. Sees upside into 2027; 20-30% over the next 12-18 months. No dividend.