Even in This Rich Market, Freeport-McMoRan Inc. Is Offering Investors Value

While the rest of the market seems to be hitting a new all-time high every day, shares of Freeport-McMoRan (NYSE: FCX) haven't done a thing this year. In fact, the stock is down about 1% versus a double-digit gain for the S&P 500. That underperformance has come even as the prices of both copper and gold are higher on the year. It's a scenario that has Freeport-McMoRan offering value at a time when cheap stocks are getting harder to find.

On the surface, it would seem Freeport-McMoRan trades at a nosebleed valuation, since its current price-to-earnings ratio is 57 while the market "only" trades at trades at 26 times earnings, which is well above its average mid-teens multiple.

However, a P/E ratio isn't the best way to value a company that produces commodities, because write-offs and other one-time charges can significantly affect reported earnings. For example, last year the company reported a loss of $4.1 billion, or $3.16 per share, despite generating $3.7 billion of operating cash flow.

Source: Fool.com