QUOTE AND NEWS
SeekingAlpha  Aug 26  Comment 
By Asif Suria: Welcome to edition 218 of Insider Weekends. Insider buying dropped a little last week with insiders buying $32.38 million of stock compared to $33.73 million in the week prior. Selling increased with insiders selling $897.75 million...
Benzinga  Aug 25  Comment 
Annaly Capital Management, GNC Holdings and Southern Copper are among the companies that have seen insider buying recently. Insiders may sell shares for any number of reasons, but conventional wisdom says that insiders really only buy shares of a...
Forbes  Aug 12  Comment 
Shareholders of Southern Copper Corp (NYSE: SCCO) looking to boost their income beyond the stock's 1.5% annualized dividend yield can sell the January 2016 covered call at the $37 strike and collect the premium based on the $1.75 bid, which...
TheStreet.com  Aug 6  Comment 
NEW YORK (TheStreet) -- Southern Copper Corp. was downgraded to "market perform" from "outperform" at FBR Capital Markets on Wednesday. The firm said it lowered its rating on the copper producer based on muted copper prices and its belief...
Motley Fool  Jul 7  Comment 
These three stocks hit new yearly highs on Monday. Find out why.
TheStreet.com  Jul 7  Comment 
NEW YORK (TheStreet) -- Shares of Southern Copper Corp. are up 1.50% to $33.20 in pre-market trading on Monday following a ratings upgrade to "outperform" from "market perform" at BMO Capital. The firm said it raised its rating on the...
Benzinga  Jul 7  Comment 
BMO Capital upgraded Southern Copper (NYSE: SCCO) from “market perform” to “outperform.” The target price for Southern Copper has been raised from $30 to $40. Southern Copper shares have surged 21.33% over the past 52 weeks, while the...
Motley Fool  Jun 30  Comment 
As China comes under pressure, input costs rise, and competition heats up, Southern Copper needs to be ready for margin compression.
DailyFinance  Apr 7  Comment 
VAUGHAN, ONTARIO -- (Marketwired) -- 04/07/14 -- PACE Credit Union (PCU) and Alterna Savings, two of Ontario's leading community-cooperative banks have announced they are merging. They will operate 39 branches in diverse communities under both...
SeekingAlpha  Apr 6  Comment 
By Alpha Strategist: Southern Copper Corp. (SCCO) is one of the largest copper producers in the world. The company mainly produces copper, silver, molybdenum, and zinc wherein 78% of the revenue is attributed to copper. The following pie charts...




 

Southern Copper Corporation (NYSE:SCCO) is one of the largest integrated producers of copper, molybdenum, zinc and silver.[1] The company operates in three segments: Peruvian operations, Mexican open-pit operations, and Mexican underground mining operations. The majority of Southern Copper's revenues come from copper sales.[2] As a metals producer, the company's earnings depend largely on the demand and price of its products. In addition, Southern Coppers operations are located in Peru and Meixco and exposed to country-specific political risks.[3]

Business Growth

Southern Copper reported net income of $1.5 billion on 2010 revenues of $5.15 billion, versus earnings of $929 million on $3.7 billion in 2009 revenues.[4] Growth can partially be attributed to growing demand from emerging market economies, particularly China. In addition, the company's exploration activities in Mexico, Peru and Chile have provided additional sources of production.[5]

Trends and Forces

Emerging economies provide growth in global demand for copper

China and other emerging markets have supported growth in the demand for and price of copper.[6] In fact, global demand for copper has outpaced global supply, which has also led to higher prices. While many other emerging markets are significant sources of demand, China is by far the largest (the country comprises 40% of global demand). As a result, Southern Coppers revenues depend on the demand for copper in China.[7]

Companies like Southern Copper are spending larges amount of capital to build production facilities capable of meeting China's copper consumption. In addition, copper prices depend heavily on demand from countries like China.[8] A significant drop off in demand from China has the potential of curtailing Southern Copper's long-term growth prospects. [9]

Southern Copper's locations expose the company to political risks

In Mexico and Peru, metal resources are owned by the state, with contracts awarded by the state to firms.[10] As a result, the company is exposed to significant political and currency risks with the the Mexican and Peruvian governments.[11] In addition, the Peruvian government has significant price controls, currency controls, and investment controls, which have the potential of restricting growth and new exploration projects. Labor unrest has the potential of halting production and hindering the company's ability to meet copper demand.[12]

Competition

Southern Copper's competes with global metals producers. Its competitors are as follows:[13]

Notes

  1. Reuters: SCCO Company Profile
  2. Reuters: SCCO Company Profile
  3. Reuters: SCCO Company Profile
  4. Morningstar.com: Financials for SCCO
  5. Southerperu.com: 2010 10-k
  6. WSJ: Southern Copper Aims to Double Copper Output by 2015
  7. WSJ: Southern Copper Aims to Double Copper Output by 2015
  8. WSJ: Southern Copper Aims to Double Copper Output by 2015
  9. WSJ: Southern Copper Aims to Double Copper Output by 2015
  10. Metalsplace.com: Southern Copper reaffirms its production targets despite labour dispute
  11. Metalsplace.com: Southern Copper reaffirms its production targets despite labour dispute
  12. Metalsplace.com: Southern Copper reaffirms its production targets despite labour dispute
  13. Yahoo! Finance: Competitors for SCCO
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