With copper at 16 year high, producer like Phelps Dodge (PD) are enjoying record profits. Chinese demand and global economic expansion reduced the inventory to 31 year low and consolidation in copper industry during the 1990s bodes well for the world’s second largest copper producer. PD also produced molybdenum, a secondary metal surged 550% in two years, helping bolster margin considerably. The risk with this company is obvious, the price of copper. If the demand should fall, so will the stock. This stock surged lately because street believe the rebuilding process due to the damage from the two hurricanes will increase future demand of copper. For now I would wait for the stock to pull back to 116 before jumping back in.

This entry was posted on Monday, October 3rd, 2005 at 9:13 pm and is filed under Stock. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.