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September 19, 2019

First Quantum Minerals (TSX:FM) Up Nearly 8% Midday Trading

Disclaimer: The writer of this article may have positions in the securities mentioned in this article. The fact they hold positions in securities has had no impact on the production of this article

By Dan Kent

September 19, 2019

First Quantum Minerals (TSX:FM) is taking advantage of the booming material and energy sectors on the TSX this morning, up nearly 8% at the mid day point.

There has been no notable news on the Canadian stock, however the material and cannabis sector is on the up and up, pushing the TSX to record high levels for 2 straight days upon close.

The copper miner has posted impressive numbers over the last four quarters, either beating or meeting analyst expectations consecutively. Its most notable beat came in its final quarter of fiscal 2018, where the company posted diluted earnings per share of $0.26 when only $0.20 was expected.

Revenue has been on the up and up, as the company has saw an increase in its top line of nearly 60% since 2015, growing at a near 20% pace.

Should you be buying on the run up?

With an RSI of 75, it is clear that First Quantum’s run up may be a little over exerted. As the material and energy sectors continue to build up momentum on the TSX, it is important investors don’t get caught up in buying in during these run ups.

Analysts have a 1 year target price of $11.93 on the copper miner, which indicates only 8.8% upside from today’s levels. There is a large mix of analyst ratings on the company, varying from a strong buy to underperform, but the overall consensus on the stock is a buy.

Analysts expect the company to post earnings growth of  15% annually over the next 5 years, but keep in mind the company is currently seeing quarterly revenue growth shrink by nearly 11% a quarter. With a 5 year PEG ratio of 1.17 and trading at 17 times forward earnings, you’re paying a premium at this current time. First Quantum lags its sector peers on both ROI and ROE, coming in at 2.47 and 4.80 respectively.

The company is ramping up both its copper and gold production, producing 28% more gold and 11% more copper. However, the company has saw its realized copper price drop by $0.15 compared to last quarter, coming in at $2.80 a pound. Obviously with golds run up as of late, First Quantum is seeing a significant increase to the sale price per ounce on its gold production,  coming in at $1231 an ounce compared to $1181 in 2018.

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Dan Kent


An active dividend and growth investor, Dan has been involved with the website since its inception. Dan is primarily a researcher and writer here at Stocktrades.ca, and his pieces have numerous mentions on the Globe and Mail, Forbes, Winnipeg Free Press, and other high authority financial websites. He has become an authority figure in the Canadian finance niche, primarily due to his attention to detail and overall dedication to achieving the highest returns on his investments. Investing on his own since he was 19 years old, Dan has compiled the experience and knowledge needed to be successful in the world of self-directed investing, and is always happy to bring that knowledge to Stocktrades.ca readers and any other publications that give him the opportunity to write. Dan manages his TFSA, RRSPs and a LIRA at Questrade, and has compiled a real estate portfolio of his primary residence and 2 rental properties, all before his 30th birthday.

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