Bullish option flow was detected in FCX stock on November 11, 2021.
FCX Stock Bullish Option Flow
Bullish option flow was detected in Freeport McMoRan with 101,023 calls trading, 4x expected, and implied vol increasing almost 2 points to 49.55%. Nov-21 $41 calls and Jan-22 $45 calls were the most active options, with total volume in those strikes near 20,800 contracts.
Make sure to review this lesson on option flow so that you understand the image above.
Freeport-McMoRan Announces Program for Increased Cash Returns to Shareholders
On November 1, 2021, Freeport-McMoRan Inc. (NYSE: FCX) announced that its Board of Directors approved a new share repurchase program authorizing repurchases of up to $3 billion of FCX common stock.
- New $3.0 billion share repurchase authorization
- Addition of variable cash dividend on common stock
- Actions achieve objective of performance-based payout framework
The Board also approved the addition of a variable cash dividend on common stock for 2022 at an expected annual rate of $0.30 per share. The combined annual rate of the base dividend and the variable dividend is expected to total $0.60 per share. The Board intends to declare quarterly dividends for 2022 of $0.15 per share (including the $0.075 variable component), with the initial quarterly dividend expected to be paid on February 1, 2022. Based on current shares outstanding totaling 1.47 billion, the total common stock dividend (base and variable) expected to be paid approximates $0.9 billion per annum.
As previously reported on February 2, 2021, the Board adopted a financial policy for the allocation of cash flows aligned with FCX’s strategic objectives of maintaining a strong balance sheetThe balance sheet is a snapshot of a company's financial position at a specific point in time. It shows the company's assets, liabilities, and equity. and increasing cash returns to shareholders while advancing opportunities for future growth. The combined base dividend, variable dividend and share repurchases are designed to achieve the objectives of this performance-based payout framework.
Richard C. Adkerson, Chairman and Chief Executive Officer, said: “With the recent achievement of our net debt target, strong execution of operating plans and favorable market conditions for our products, we are pleased to commence implementation of our performance-based payout framework. These actions allow us to return a designated portion of our cash flowThe cash flow statement provides a detailed overview of the cash inflows and outflows of a company over a specified period of time. It includes cash received from operations, inves... to shareholders efficiently while maintaining a strong balance sheet and providing substantial resources and capacity for investments in our long-term future.”
Cash returns to shareholders will be administered in accordance with the previously announced performance-based payout framework whereby up to 50 percent of cash flows generated after planned capital spending and distributions to noncontrolling interests would be allocated to shareholder returns and the balance to debt reduction and investments in value enhancing growth projects. FCX’s payout framework is designed to maintain its net debt at a level not to exceed the range of $3.0 billion to $4.0 billion (excluding project debt for additional smelting capacity in Indonesia). The Board will review the structure and the amount of performance-based payouts at least annually.
The timing and amount of any share repurchases will be at the discretion of management and will depend on a variety of factors. The share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion. The declaration and payment of dividends (base or variable) is also at the discretion of the Board and will depend on FCX’s financial results, cash requirements, business prospects, global economic conditions and other factors deemed relevant by the Board.
FCX stock technical analysis
The large players volume is surging higher and is a thing of beauty. We also had a recent Pocket Pivot signal. Both the short term and long term trends are positive. This is a very positive sign. Although FCX has an excellent technical rating, it does not offer a high quality setup at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first. Click here to sign up for email alerts on when FCX stock is a good entry.