Irwin Michael, B.Com, MBACapstone Copper CorpCS.TOBUYSep 20, 2013

The price of CS is largely dependent on the underlying price of copper, and copper is a factor of both supply and demand. We believe that the long-term demand for copper is strong, and thus we like the long-term prospects of copper. CS is expecting good sales and earnings growth over the next couple of years, and its recent growth has been strong. Its valuation is decent and debt levels are OK. It has been growing its balance sheet and expanding its operations. As a growth play on copper, we like CS and it is set to report earnings next Friday November 3. We feel that in a better market, the materials sector will perform well and CS can benefit from this performance. We would prefer to wait until earnings to add to the name, but for a growth play on copper, we like CS.
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Bullish on copper, but does not own shares.
Company highly levered to copper prices.
Unsure on short term demand for copper given recession concerns.
Takeover speculation on the company recently.
Well run company. 

Good takeout target. Cost structure has come down. Better than average, but not top tier. Pretty good balance sheet. Leveraged play on copper. China reopening plus the need for copper gives real leverage to better copper prices.

Revenue was $362M, ahead of estimates ($351M); EPS was 6c, vs 3.9c expected. 
EBITDA of $80.5M missed estimates of $98.6M. 
Copper output rose to 45,500 tonnes, with new production from Chile boosting numbers. 
Costs were $2.50/lb. 2023 guidance is for 170,000 to 190,000 tonnes at costs of $2.50 to $2.70. 
Results look good but not overly noteworthy one way or the other.  
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Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The company is cheap, trading at 8x forward earnings. Growth rate is expected to be rapid in the next two years. Very little debt and has positive cash flows. Insider ownership is high. Unlock Premium - Try 5i Free

It is on his watch list. It has been there for a number of years. It has not done very much but once in a while it perks his interest. He is going to do a review in the next couple of weeks and it may move it up then.

He doesn’t follow this and hasn’t read a recent balance sheet.

He doesn’t follow this stock actively. It’s involved in copper, ranks around 550 in his 700-stock database. PE reasonable. Earnings are expected to rocket from 2 cents to 19 cents this year and then drop back in 2019. Free cash flow is positive, but there have been downward estimate revisions. The estimate of lower earnings in 2019 is the primary investor concern for this stock. (Analysts’ price target is 2.10$)

(A Top Pick Jan 6/17. Up 4%.) Still quite positive on base metals, including zinc and copper. Now people are chatting up copper and saying that if car sales hit the number that the electric car makers are suggesting, then copper would be in short supply.

You would think that this would do a little better, but it is very volatile. That is really tied to the higher cost structure. Very leveraged to copper prices. A little less detached from very specific operational issues. They had 3 North American mines. Nice growth profile, but very sensitive to copper prices given the elevated cost structure. Not his way of doing things. Low cost structure wins in any environment.

(Top Pick Jan 6/17, Up .75%) It did a U-turn. It will benefit from base metal prices over the next couple of years.

He likes their operating performance, but hates their balance sheet. There are easier ways to make money in copper mining with companies that have lower financial leverage.

Hold or Sell? A high cost producer in the $2.20-$2.30 range, all-in costs for its copper production. A very high beta stock with strong reaction to the price of copper. They had a pretty good 4^th quarter and were able to generate some free cash flow, which was encouraging. This is kind of in the “wait and see” box.