Freeport-McMoRan - Industry Leader with a Good Outlook

Most forecast show the need for copper will almost double in the next decade. Freeport-McMoRan is a good pureplay copper company and could benefit if this demand forecast turns out to be accurate.

They have a long track record of developing projects in complex jurisdictions. Strong reputation and infrastructure in the four countries they mine in: Peru, Chile, USA, Indonesia. Decades of block caving experience, with Grasburg in Indonesia being the largest block cave in the world. Freeport also has talented leaders with a lot of experience and a focus on ESG, innovation and operational excellence.

The fifteen year average net free cash flow (NFCF) is $1.4B and the fifteen year average dividend is 1.9% at the current $47B market capitalization.

Some negatives and risks: Shares outstanding have tripled in last 15 years, but have stayed consistent over the previous five years. The main risks to this analysis is a commodity price decline, economic decline or the company’s inability to find growth opportunities. OWI believes these are all short term risk and they would create good buying opportunities. They have long life assets with 30+ years of reserves, one of the most experienced leadership teams in the industry with an end market that has a strong demand forecast.