0R15 9025.0 0.0% 0R1E 9410.0 0.0% 0M69 None None% 0R2V 247.99 9682.643% 0QYR 1567.5 0.0% 0QYP 439.3701 -2.9016% 0RUK None None% 0RYA 1597.0 1.2682% 0RIH 195.55 0.0% 0RIH 191.4 -2.1222% 0R1O 225.5 9683.0803% 0R1O None None% 0QFP 10475.8496 107.8542% 0M2Z 252.573 0.2373% 0VSO 33.0 -7.3164% 0R1I None None% 0QZI 622.0 0.0% 0QZ0 220.0 0.0% 0NZF None None% 0YXG 222.05 -4.1318%
Company Overview: Southern Copper Corporation (NYSE: SCCO) is a major integrated copper producer with the industry's largest copper reserves. It owns and operates mining and metallurgical plants in Mexico and Peru and conducts exploration in Argentina, Chile, Ecuador, Mexico, and Peru. Grupo Mexico SAB de CV, a Mexican conglomerate, owns SCCO to 88.9%.
SCCO Details
Key Takeaways from Q1FY22 (ended March 31, 2022)
Sales & Gross Profit Key Highlights; Analysis by Kalkine Group
Dividend and Capex Updates:
Other Key Findings in Q2FY21
Balance Sheet & Liquidity Position
Key Metrics: In FY21, SCCO's operating and net margins were 55.5% and 31.1%, higher than the industry median of 20.1% and 14.1%, respectively. ROE stood at 44.2% at the end of FY21, an improvement from 22.4% for FY20. Its Debt/Equity ratio as of FY21 end was 0.80x, slightly lower than 0.91x as of FY20 end.
Profitability Metrics and Liquidity Profile; Analysis by Kalkine Group
Top 10 Shareholders: The top 10 shareholders together form around 91.70% of the total shareholding, while the top 4 constitute the maximum holding. Grupo Mexico SAB de CV and BlackRock Institutional Trust Company, N.A. hold the maximum stake in the company at 88.9% and 0.59%, respectively, as also highlighted in the chart below:
Top 10 Shareholders; Analysis by Kalkine Group
Risk Analysis
Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: Over the last month, SCCO corrected 16.76%. The stock is currently trading at lower end of its 52-week range of USD 54.92 to USD 83.29. We have valued the stock using the Price/Earnings multiple-based illustrative relative valuation method and arrived at a target price with an upside of low twenties (in percentage terms). We believe that the company can trade at a premium compared to its peer's average, considering the reduction in the cash cost, stable margins, and largest copper reserves. We have taken peers like Barrick Gold Corp (NYSE: GOLD) and Newmont Corporation (NYSE: NEM). Considering the robust fundamentals, favourable average realized prices, current valuation, and associated risks, we give a "Buy" recommendation on the stock at the closing price of USD 64.93, up 3.46% as of May 04, 2022.
SCCO Technical Chart, Data Source: REFINITIV
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.
Note 3: The report publishing date is as per the Pacific Time Zone.
Technical Indicators Defined
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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