Freeport McMoran Copper & Gold (FCX-N)

The best way to play copper which is seeing demand going up and supplies limited.

He's selling calls on this. The volatility spike is giving him opportunities to write calls for a $57 strike two weeks out (11% annualized). 

Owns it for the copper and the gold. Setup for copper, in particular, is very bullish. We're in a new bull market for materials. New discoveries of copper almost non-existent. Big believer in companies that can set price.

Copper's popping today on news that Chinese smelters are shutting down. Wind at its back on the secular front like EVs, China will emerge from recession. Just because EV adoption is slow, doesn't mean we're not moving in that direction. One study says copper demand will rise 50% by end of decade. Well capitalized and managed. Not expensive. Yield is 1.41%.

Sold it because he doesn't want the commodity exposure and is afraid about the economy and uncertain about China. Wasn't a big position either.

Copper supply's very challenged. Copper is needed for this de-carbonization cycle. Could be a takeover target. Beat on Q4. Guidance was in line. World's largest pure-copper miner. He models 24% EPS growth, trading at 19x, strong balance sheet. Yield is 1.6%.

Copper supplies are really challenged. Copper is needed for the next 20-year cycle of de-carbonization. As big as it is, could be a takeover target. Beat on Q3, left 3-year guidance unchanged. Moderating costs. Good balance sheet. Trading 18x, he models 22% growth. On PEG, works well. Yield is 1.5%.

Likes it for the infrastructure build-out. Costs are falling while supply-demand is tight. 

Geopolitical concerns a worry for this business. Country risk must be taken into account. However, assets are valuable. If looking for copper exposure, could be a good option. Investors must weigh risk vs. reward. Good business model with significant free cash flow. Copper also a cyclical business. 

FCX is down 12% this year, as investors adjust to a possible recession, high rates, a strong US dollar and a slowdown in China. 3Q earnings were good, but Indonesia's shifting regulatory issues are causing concerns. N. American production will need to improve it is to meet its production goals this year. Its peers have been weak, but it is more expensive than many at 21X earnings. We still consider it a very good stock for copper exposure. 
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He used to own this. Copper prices are in a sideways trend, going nowhere.

He just sold it, because he expects a recession and not a soft landing. Copper prices were falling until this week, due to weakening demand despite the need for copper in EVs. FCX was always a trading stock.

Copper is trending up and he expects a new stage of growth due to EVs.

A polarizing stock, because they mine copper. Bulls says this is the battery metal of the future that'll help green the grid. True. Bears say copper is tied to the economic cycle, which is slowing now. In fact, manufacturing has been slowing for 8 months. They had good mines in the US and Indonesia and have scale. He doesn't want copper now.

Likes the materials space, an early-cycle winner. Chart in a sideways pattern, but metrics look decent.