Discussion in 'Stocks' started by drsteph, Apr 9, 2006.

  1. Southern Peru Copper...

    Currently at highs, still relatively low P/E,trading up on Copper's strength. Very interesting situation in Peru regarding upcoming elections between: 1) Humala, a probable Chavez-style despot, 2) Garcia, a reformed Marxist, and 3) Flores, the conservative mainline traditional candidate - except she's a woman.

    Neat double digit dividend on the stock.

    Fairly large selloff on Friday due to concerns Humala will win and either impose heavy taxes on foreign based investment or worse.

    At the least, expect heavy volatility.

    Any opinions?
  2. mizer


    A stock that has a float of 22 million sells off 2 percent and you consider that large?
  3. 4% if you count from Thursday's high to Friday's close. Hardly a meltdown, but a sell off to be sure. Semantics here. Did you have an opinion?

  4. Metals sold off and PCU went along. You sound like a news reporter....as if there has to be some "reason" for something to move.
  5. 'kay, now I'm a reporter.

    Let's try this...

    PCU broke out descending triangle on the upside on weekly charts on 3/30. I see strong support at $76 with short term support at $89. 14 day RSI indeterminate with StochRSI and T3 still bullish by my indicators.

    Recent news reports put the race in likely run-off scenario between 2 of the 3 candidates on may 7, may 28th or june 4th with the new candidate assuming office 7/28.

    PCU div announcement last year on 4/13. If unfavorable results seem likely, wouldn't be surprised to see a "special" dividend.

    Note PCU may bid for BHP's peru Tintaya mine on Tuesday. Curious to see the offer.

    Now, if you don't mind, I gotta take this analysis over to my publisher at CNBC so we can get it on the air.

  6. I haven't been following the Peruvian elections. Have any of the candidates actually proposed anything sinister regarding PCU? No doubt Peru would become uninvestible if Humala won, but these things tend to play out slowly.
  7. Humala wants to force foreign investors in Peru's mining companies to renegotiate their relationships with the government to redistribute wealth to Peru's impoverished majority. I believe he has been quite explicit, and spoken particularly about the mining companies. I do not have any knowledge of direct statements made against PCU itself.

    Garcia has not expressly stated such actions, but has a history of significant leftist leanings, so is suspect also. (although IMHO as a politician first and foremost, I doubt he would pursue such policies)

    The primary election is over, with Humala leading slightly with 30% of the vote and each of the other two frontrunning candidates with 24% of the vote (Garcia, Lourdes). The runner up is simply too close to call at present.

    So, no sell-off on PCU this morning, which is up $2.00 (short covering?) and Copper marches on to new highs.

    Have fun... I think this thread is dead.