In the U.S., not surprisingly, Freeport has been affected by homebuilding and the weak auto industry, Adkerson said. But the U.S. makes up only 12% of global copper consumption. China, which makes up over 25%, has been a “remarkable performer” that has driven growth for FCX, even though it does a limited amount of direct business in that country.
The future of the industry is in China and the less-developed world, Adkerson said. He has a “positive outlook” for the copper business, mainly due to the global growth story that is fueling the business.
Adkerson pointed to the significance of Western Europe and Japan, as well. Anywhere there is infrastructure that needs development, copper is the commodity whose characteristics are the most critical, he said. “The market is going to be driven by the fundamentals of supply and demand.” As the largest producer of copper on the planet, Freeport-McMoRan is in position to make even further gains.
Guy Adami loves the stock and said its acquisition of Phelps Dodge was a “steal.” He thinks FCX goes to $120.
Jeff Macke expressed concern about the shareholder base from a stock perspective. He would buy it, but only on a pullback.
It’s all about the global growth story, Pete Najarian said, and Freeport fits right in. His only concern, like Jeff, is valuation. Own it on a pullback, he said.