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In its conference call on the purchase of McMoRan (MMR +82.2%) and Plains Exploration (PXP...

In its conference call on the purchase of McMoRan (MMR +82.2%) and Plains Exploration (PXP +26.1%), Freeport McMoRan's (FCX -13.5%) Richard Adkerson says the deal is an add-on to its mining business and not a diversion from current strategy, and FCX will continue to look for new mining opportunities. With margins and cash flows strong, FCX anticipates continuing its current dividend.
Comments (7)
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
     
    I'd just like to point out that SA contributor Stone Fox Capital recently wrote a Pro article (http://seekingalpha.co...) with some solid analysis of why McMoRan had solid potential. Good call.
    5 Dec 2012, 11:41 AM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    Can someone provide the risk-arb math on these deals, re: current market discount. Thanks.
    5 Dec 2012, 11:52 AM Reply Like
  • Day Trader001
    , contributor
    Comments (730) | Send Message
     
    Appears like this could be a great expansion model especially for long-term investors!
    5 Dec 2012, 12:10 PM Reply Like
  • dook
    , contributor
    Comments (47) | Send Message
     
    When a company pays the average target price for companies that are not doing well, there has to be a loss of value to the acquirer, which will hopefully be made up over the next year, but a markdown of the acquirer is called for. For patient investors, FCX is promising, but this will not be a near-term, or even medium-term winner. I would stand aside and look to buy when the timing may be more favorable.
    5 Dec 2012, 12:59 PM Reply Like
  • J. J. Krochmal
    , contributor
    Comment (1) | Send Message
     
    If prospects look so good, then why has the investment community reduced the value of FCX by over $/Share?
    5 Dec 2012, 02:44 PM Reply Like
  • Day Trader001
    , contributor
    Comments (730) | Send Message
     
    J.J. “Nice first comment”

     

    It is natural for any company to drop when making a large purchase, this goes beyond that! Therefore, you would naturally get panicked/pissed off sellers and stop-losses kick in.

     

    It is not simply that this :prospect looks so good" If you don't like it, don't buy. Dook has a very good point.
    5 Dec 2012, 03:29 PM Reply Like
  • dabber
    , contributor
    Comments (3) | Send Message
     
    Adkerson did not act in the best interests of his FCX shareholders and should be replaced. The FCX Board needs to go as well.
    6 Dec 2012, 07:23 AM Reply Like
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