Russ Winter

Freeport-McMoran: Dead Money Until Copper Prices Recover

Actually the conversion when FCX is below 61.25 is 1.6327 shares. Thus the premium or parity of the cv pfd is very small right now: 1.6327 x 16.80 FCX= 27.42, with FCXpfM trading about 32.50. Thus the pfM will get a direct play on the stock while paying a huge yield. In my opinion buying the stock over the pfM would be almost criminally negligent right now.
www.quantumonline.com/...


On Dec 05 03:44 PM SouthShore wrote:

> First Davy, decent write up. Thanks. Will look for any comments
> from FCX investor relations that you post.
>
> Regarding the preferreds: The convertible preferred mentioned above
> isn't as attractive as I thought at first glance. As long as FCX
> common moves down, then the payout from the FCXpM convertible preferreds
> is more like a return of capital with the preferred share price not
> rebounding. Upon conversion you won't have a dividend to look forward
> too, either. Thus, unless you can buy the convertible at a large
> discount to its conversion including cumulative dividends, then you
> are just buying the common. Probably better is the FCXGL preferreds
> that can't be redeemed unless the common shares trade above $69.14/sh.
> I would like to hear thoughts on this PK. They are cumulative and
> perpetual.
>
> Also, if Copper returns to historic levels below $1/lb and stays
> there, can anyone be confident that FCX is viable long term? Again,
> the more models the better here. I put FCX under $10/sh as a guess
> if this happens.
>
> Cheers,

Freeport-McMoran: Dead Money Until Copper Prices Recover

The FCX cv pf M yields 20% and the payout looks well covered, Not bad for "waiting".