In economic circles copper is sometimes called "Doctor Copper" because it's a good indicator of the overall health of the economy. If mining giant Southern Copper's results are any indication, the economy just got over a cold and is feeling fine. Southern Copper, ranked No. 1 in its industry, reported a 72% leap in earnings last quarter to $1.22 per share on a 36% increase in revenue to $3.12 billion.
On Tuesday, the Relative Strength (RS) Rating for Southern Copper rose to 83, up from 80 the day before. The market's biggest winners tend to have an RS Rating above 80 in the early stages of their moves. Southern Copper just moved higher in that winner's circle.
Southern Copper No. 1 In Its Industry
Southern Copper holds the No. 1 rank among its peers in the 46-stock Mining-Metal Ores industry group. Ero Copper and Freeport-McMoRan are also among the group's highest-rated stocks.
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Southern Copper operates on an international basis, with mines in the U.S., Peru and Mexico. In addition to copper, the company also mines molybdenum, silver and zinc. It's listed on the New York Stock Exchange. Additionally, Southern Copper is 88.9% owned by Grupo Mexico, a Mexican company listed on the Mexican stock exchange. Its U.S. headquarters is in Phoenix.
In terms of fundamentals, the company has posted rising EPS growth in each of the last two reports. Revenue growth has also increased over the same time frame.
The first three quarters of 2023 Southern Copper showed strong growth. At the end of the year and in the first quarter this year it reported year-over-year decreases in sales and profits. Then it rebounded to report outstanding results last quarter.
The consensus forecast for this quarter, in fact for the next three quarters, is continued strong growth with EPS seen rising 43% this quarter, then 119% and 30%. Sales growth, too, is expected to be in the double-digits range this year.
Can It Return To All-Time High Set In May?
Southern Copper stock is building a consolidation with a 129.79 entry, its all-time high, set on May 20. See if it can break out in heavy trading. The mining company's stock dipped to 90.34 on Aug. 5 and then it turned upward. Tuesday afternoon SCCO stock traded at about 105, up slightly for the day.
Among its other key ratings Southern Copper has an 88 Composite Rating out of a best-possible 99. It boasts a strong 89 Earnings Per Share Rating and an outstanding A SMR Rating (sales + profit margins + return on equity) on an A-to-E scale. The A rating shows the company has excellent fundamentals.
IBD's unique Relative Strength Rating measures technical performance by showing how a stock's price action over the last 52 weeks measures up against that of other stocks on the major indexes.
Please follow James DeTar on X, formerly known as Twitter, @JimDeTar
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