Southern Copper (PCU)

[KatonahMike]

Southern Copper just hit a new 52 week low today. I've had my eye on it since before the split, but the MACD told me to wait... and still does. I don't know how much lower it can go, so I'm tempted to start building a position now in the $24 range.

Does anyone know if the strike situation they're experiencing right now is fairly routine? I mean, is it something they've dealt with successfully in the past?

Mike

[KatonahMike]

I started building my position in the low $24 range and added to it in the low $23 range. I believe I bought in time for the upcoming quarterly dividend payment (which is almost at a 10% annual yield), so this should help to offset any short-term downside. I'm thinking I will add even more if it drops below $22. The large dividend is very attractive, and I get the sense that, unlike some of the financials that pay big, this company is not necessarily in major trouble- just experiencing a cyclical downtrend.

-Mike

[adampepp]

I did some rudimentary research on PCU and it seems like one of those companies that you can just buy and forget for about 50 years given the inevitable rise in demand for copper.. its used for so many different things, and is the best conductor around (besides silver). Plus, PCU owns very valuable mine properties to milk for a really, really long time. The company produces copious cash flows so the dividend is very safe and collecting 10% on a commodity part of your portfolio is a nice proposition.

[adampepp]

After further investigation, this is a painless industry/company to understand and valuation is really cheap. Global copper stockpiles still remain low and PCU has a contract to hedge against copper below $3.40. PCU has done a good job of maintaining profitability during copper downturns and becoming insanely profitable during copper booms. The current copper boom should continue in the forseeable future, since copper demand is primarily based around construction and electric applications (emerging markets are primary consumers, particularly China). The current Cananea mine strike is a temporary setback and the lower output combined with copper prices dropping have punished PCU unduly.

At $25/share, PCU is probably valued at $32/share. This is not a 50% MOS as we would expect, but they key here is that PCU is paying an 8% dividend at $25/share, and I see no reason that the dividend should be threatened. The stock price has potential to appreciate to $40+. Considerable upside with a get-paid-while-you-wait prospect.. I'm a buyer. The risk vs. reward profile at $25/share is very favorable.

Adam

[KatonahMike]

It's tough to tell, but the punishing could continue for a little while longer. I read that some Chinese manufacturers are deliberately using stockpiled copper to push speculators out of the copper market, so copper prices could drop more. If so, PCU could follow despite contracts, since emotion is also a factor.

If it goes below $22, I will consider adding more to my portfolio. -Mike

[KatonahMike]

I bought more again at 20.40, watched it go down below 20, and now it's back over 21. Very happy with my purchases so far. There was a nice dividend payout in early September.

[Stockowner]

Down 10 percent today. In just a few months, the stock has been down almost 60 percent.

Why this much? I havent found any news to justify this.

[tombrown1]

The news never comes out until after the price drop.

[Gunnski]

Or risen!

News is already built into the price!

We are second class citizen's when it comes to the market. The insiders have already tried to pick all of the meat off of the bone, before it is presented to us. Hey, they need their tiny bonus.

Look for stocks in a flat line/sideways price action (consolidation) or flat price channel. Look at abnormal up vol., in increments & start following that stock. Look for a confirmed breakout above the resistance line.

That is the only way you can get in with the insiders. Unless you play golf with them @ the C.C.

Screw the tools. They are all laggards. Concentrate on the volume & price action.

That is why I am proud of the prior QCOR post. Sometimes the little guy, with flexibality can get in and out of the smaller, less liquid stocks, to scrape (not scalp) a tiny profit. In this current market enviroment.

Anyone pick up a $2.00 profit per share, short term, lately on a stock?

QCOR:

Please click on the chart to enlarge.

Even Tim Sykes (T.V. show investing "Maverick"), gave QCOR as a long at $6.98 on Sept. 25. We were already in.

Tim is a short selling penny stock guy.

He was'nt in just above $5.00 like we were. Even "Goose" could have figured this one out. He cashed out right away for a nice profit of $45.00. Were still holding.

Here goes re: QCOR & the chart above. This was the "perfect storm" for an investment in this trader's market.

Look @ Vol. during July 21-28. Interesting. Who is buying? Those green bars are telling you something. All around 1M shares per day, up just a tad over recent Vol. I wonder who knew something good was coming?

Put on watch list & follow.

That resistance line (horizonal line placed on the chart), just above $5.00 is where you want to see a confirmed breakout. That was hard to put on the chart, just like cutting the tops off of carrots. Don't be afraid to draw on your chart! We can do that. A straight friggen line. Price broke above that line & closed above on Aug. 25th on a nice green candle.

Trend lines, Support lines, Resistance lines, should touch at least three (3) candles. I use the wicks to include the complete price range/volitality. Others use the body of the candle. Use whatever works for you.

Then the next day closed above the resistance line (confirmed breakout). Yes, it was a red candle, but it closed above resistance line. That is huge!. Then a retrace, which is to be expected, (flush out the last sellers), and needed, then off to the races. Check out the vol. after the breakout. Oh my, we have a live one here!

Thats the facts, Jack!

[.Smitty.]

Gunski,

Is this straight out of the book you recommended? I can't remember the name of it, but I mean the strategy you take towards investing on these types of stocks? Seems interesting and I'm looking for another book to read. Coming from you, I'm pretty confident it'd be a great one.