Raw material miners are having a tough year. With risks of a global slowdown ahead, investors cannot expect much from Freeport-McMoRan (NYSE:FCX) or Cleveland-Cliffs (NYSE:CLF). But now that FCX stock traded above $10 in the last week, investors should look at it again.
In the third quarter, the company reported a loss, as copper production fell 14% and gold output fell 56%. Freeport explained that output from is Grasberg mine fell as it transitioned from open pit to underground. Still, the company forecast strong full-year copper, gold, and molybdenum sales.
Hold FCX through beyond 2021. Grasburg and Lone Star are two major initiatives that will pay off. The latter has a project that on schedule for copper production next year.
Cleveland-Cliffs reported Q3 EPS GAAP of $0.33 even though revenue fell 25.1% from last year to $555.6 million. This is solid performance despite the tough environment. EBITDA (adjusted) was $144 million.
The iron ore market is heading back to normal. Expect pellet premiums in 2020, even though Vale (NYSE:VALE) forecast otherwise.
Your Takeaway
CLF stock does not reflect the potential turnaround because it missed its export target by 500,000 tons. So as exports resume in Q4, the stock will trade higher to reflect that upside potential.
