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Freeport (FCX) Hits New 52-Week High: What's Driving It?

Shares of Freeport-McMoRan Inc. FCX scaled a fresh 52-week high of $19.79 on Jan 2, before closing the day at $19.77.

The company has a market cap of roughly $28.6 billion. Average volume of shares traded in the last three months is around 16.9 million.

Freeport’s shares have surged 62.1% in the last six months, significantly outperforming the industry’s 37.3% growth.

Driving Factors

On the third-quarter earnings call, Freeport stated that it expects sales volumes for 2017 to be roughly 3.7 billion pounds of copper, 1.6 million ounces of gold and 94 million pounds of molybdenum, including 1 billion pounds of copper, 625,000 ounces of gold and 23 million pounds of molybdenum for fourth-quarter 2017.

Freeport is taking actions to cut mining costs and manage capital expenditures amid a challenging operating environment. For 2017, Freeport’s copper cost guidance of $1.19 per pound reflects a decline in consolidated unit net cash costs from 2016 level of $1.26 per pound. This should lend support to its margins.

The company also remains focused on reducing debt. Its total debt has declined around 21.7% year over year to $14.8 billion at the end of the most recent quarter. It is also conducting exploration activities near its existing mines with a focus to expand reserves that will support additional future production capacity.

Zacks Rank & Other Stocks to Consider

Freeport currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Huntsman Corporation HUN, Daqo New Energy Corp. DQ and Kronos Worldwide Inc. KRO, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Huntsman has an expected long-term earnings growth rate of 8%. Its shares have soared 73.6% in the last year.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have rallied a whopping 216.7% over a year.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have surged 104.5% in the last year.

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