A Board Member’s Limited Partnerships Keep Buying Freeport-McMoRan Copper & Gold Inc. (FCX)

Page 1 of 2

According to a Form 4 filed with the SEC, two limited partnerships connected to Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) Board member James Flores together purchased over 500,000 shares of stock in late July at prices of about $28.65 per share. Studies show that stocks bought by insiders tend to narrowly outperform the market on average (read our analysis of studies on insider trading) and this makes some amount of sense since unless they are confident in the $28 billion market cap basic materials company’s prospects insiders should prefer to diversify their wealth. Investors can’t imitate every insider purchase, and shouldn’t do so blindly, but these stocks can serve as initial ideas for further research.

Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) has fallen over 25% since the beginning of December 2012 on a number of factors. First, the company announced that acquisition of two oil and gas companies; markets believed that management might be overpaying for these acquisitions, in addition to more common concerns regarding a lack of focus as production diversified. In the second quarter of 2013, Freeport-McMoRan’s product sales slipped slightly versus a year earlier and with production costs increasing the business experienced a more than 50% decrease in operating income. To some degree this is a one time event as the company adds its oil and gas subsidiaries (which had been struggling prior to the transaction).

Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)Earnings per share in Q2 were 49 cents; annualizing that figure yields a P/E multiple of 14 at current prices. It’s possible that Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) will better integrate its new acquisitions over time, leading to more efficient operations, but the dominant factor swaying its returns will be commodity prices. The gold market has been weak year to date, and copper prices are also down year to date on macro concerns including worries that Chinese growth is slowing dramatically. Income investors should note that Freeport-McMoRan currently pays a dividend yield of more than 4%.

In addition to insider trading activity, Insider Monkey tracks quarterly 13F filings from hundreds of hedge funds as part of our work developing investment strategies (for example, we have found that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year). This database also allows us to track interest in individual stocks over time. Billionaire John Paulson’s Paulson & Co. reported a position of 9 million shares in Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) at the end of March (see Paulson’s stock picks).

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!