Freeport-McMoRan has been one of the best-performing stocks in this current bull market, gaining 640% since March 2020 vs 101% for thee S&P 500 $SPX500 . It is also my second-best investment after GameStop $GME . Is it still a good investment?
Freeport-McMoRan is one of the largest Copper $COPPER miners in the world. They are also a gold $GOLD and Molybdenum miner but their main focus is copper and the stock price is correlated to copper prices. Copper is the second-best electrical conductor and the demand for copper is increasing because of electrical vehicles and renewable energy. But the supply is not here to meet the demand and we are seeing a copper supply gap.
Freeport-McMoRan is one of the copper miners with the highest production costs, which means they are going to do well in a copper bull market. They are very sensitive to copper prices. However, things are improving and now production cost is going down and the company is even returning money to shareholders through buybacks and a variable dividend. FCX has even repaid a big portion of its debt.