Freeport-McMoRan Copper & Gold Inc. (FCX), Goldcorp Inc. (GG): The Worst Sector for Investors in the First Half of 2013

Page 1 of 2

It was a great first half for many investors as the market, as measured by the S&P 500, was up by about 10%. The health care sector led the way as it appreciated 19.1%. Even investors in slower growing sectors like utilities and energy did well, as those two sectors were up 7.7% and 8.6%, respectively. That being said, not all investors felt the market’s lift evenly, though all sectors were positive. The one sector that wasn’t very kind to investors was the materials sector, which squeaked by with the lowest appreciation at 1.7%, though many stocks in the sector simply got crushed. Let’s take a look at what went wrong.

Hint, following the yellow brick road didn’t lead anywhere good. Source: Gold Footpath by George Hodan.

Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)

Gold stocks have been hit particularly hard so far this year. Investors in gold miners like Goldcorp Inc. (NYSE:GG) and Yamana Gold Inc. (NYSE:AUY) have been crushed as those stocks are down by 34% and 45%, respectively. The big culprit here is that gold has completely lost its luster with investors. The shiny metal fell to a three-year low of under $1,200 an ounce. In the second quarter alone the price of gold dropped by more than $400 an ounce, which was a 25% plunge. The following chart shows just how bad it’s been for gold miners.

AUY ChartAUY data by YCharts

Gold investors weren’t the only ones having a rough year. Other commodities like silver and copper have been sinking this year as well. That has sent top stocks like Silver Wheaton Corp. (NYSE:SLW) and Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) down by double digits. Again, looking at the chart, you can see a pretty big correlation between falling commodity prices and the subsequent fall in the price of each stock.

New York Silver Price ChartNew York Silver Price data by YCharts

Many of these companies were hit by a one-two punch as falling commodity prices were magnified by company specific issues. Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), for example, spend most of the year working to close its transformative oil and gas deals. The company was also hurt by a collapse at one of its top mines, which forced it to shut down production. Meanwhile, Goldcorp Inc. (NYSE:GG) endured project start-up delays at its Cerro Negro mine in Argentina. Even silver streamer Silver Wheaton Corp. (NYSE:SLW) was hurt by a project start-up delay as the company, which has a silver streaming agreement for the Pascua-Lama mine in Chile, was hit by that mine’s water issue delay. The mining industry has been riddled by both cost overruns and start-up delays, which have really hit profits and taken the stocks down with it.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!