Freeport-McMoRan’s 2016 outlook
The last year was nothing short of a nightmare for Freeport-McMoRan (FCX) investors. The stock ended 2015 with losses in excess of 70%. The mining sector (XME) itself had the worst year since the global financial crisis of 2008–2009, and copper producers fell to multiyear lows during the year.
Looking at the other copper producers, Teck Resources’ (TCK) performance was no better. It saw its market capitalization erode by almost 75% during the year, as can be seen in the graph above. Glencore (GLNCY) also ended the year with similar losses. However, Southern Copper (SCCO) managed to end the year with losses of only about 8%.
Freeport experienced a small rally around Christmas. However, as we noted in our series Freeport-McMoRan’s Christmas Rally Fades Away as Reality Sets In, the rally was short-lived and the stock moved to fresh 52-week lows.
Investors waiting for a respite from 2015’s fall were in for a disappointment as Freeport and other copper producers resumed their downslide as soon as 2016 began. Freeport has seen downward price movement of 20% in the first trading week of 2016.
In this series, we’ll explore Freeport-McMoRan’s 2016 outlook and will examine the various factors that could drive Freeport’s performance this year. But before that, let’s begin by analyzing what’s driving Freeport’s recent downfall.