Saturday, June 23, 2012

"A Penny for your thoughts about the second half of 2012. Copper is a place to park some money with the purchase of Freeport-McMoRan Copper & Gold Inc. (FCX) "

Dow Jones Industrial Average 12,640.78 (Down)  Week Ending 06-22-2012

 Enough of all this EURO gloom and doom and Moody's downgrading of 15 major banks on the heels of a down 250 Dow day.

Summer has arrived!  UEFA European Football Championship, then June 30th kicks off the Tour De France, which runs through July and leads us to July 27th and the Opening Ceremonies of the 2012 Summer Olympics in London, United Kingdom. See, there is hope and fun in the world.

So no matter what happens with the Euro zone, you still need to invest your money and life will go onLife will also continue on in China , where Reuters is reporting that Chinese Copper demand in 2012 is still running at 8.4 Millions tons a year. Also with the Chinese cutting their interest rates on June 7th , demand for Copper in China could actually rise in the second half of 2012.

Note the favorite speech of the movie "Moonstruck" plumber,  Cosmo Castorini, (played by the beloved Vincent Gardenia), who historically stated,  "Cooper, it cost money, because it saves money".   (Video above provided by RV61's Channel and Youtube.).

So what to do?  Purchase Freeport-McMoRan Copper & Gold Inc. (Symbol FCX, $32.30). Freeport is a stock with a 3.97% dividend yield which is trading right now at a forward PE of 8.27.  I checked in at the sight "Guru Focus" and Ken Heebner along with Ken Fisher and Ray Dalio have taken good sized positions in the stock.  

FCX is projecting 2012 earnings of $3.97 per share and 2013 earnings of $5.06.

FCX, operates at a Net profit margin of 19.65%. Return on Equity runs at a rate of 25.35%. The PEG ratio on the stock is 1.04.  All the Copper stocks have been beaten up good this year so far and they are all presently ranked "Overweight".   This is a good timing buy and a good value with the dividend yield. The stock is currently trading below its Enterprise Value of $32.99 , (Total purchase price of a company, net of its debt and cash. Equal to market capitalization).

Also don't forget the immortal words of Rose Catorini to her husband Cosmo in the movie Moonstruck:

Rose: I just want you to know no matter what you do, you're gonna die, just like everybody else
Cosmo Castorini: Thank you, Rose. 

or this one:

Cosmo Castorini: I have no money. 
Rose: You're as rich as Roosevelt. You're just cheap, Cosmo. 

So you may as well invest in FCX and Copper, and make some money while your here on this earth!

 La Familia on "Moonstruck"

Ti Amo,


1 comment:

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