FREEPORT MCMORAN SHARES TUMBLING AGAIN AFTER BEING TURNED BACK AT RESISTANCE

Freeport McMoran, Inc. (NYSE: FCX) shares were starting to show some hopeful signs recently after a miserable decline over the last year over 60 percent. However, there may have been a successful hold of resistance at $24.15 by the bears at the beginning of May. Since then, the stock has been in tumble mode with prices closing out at $21.29 Tuesday. The recent rally in the euro / decline in the US Dollar had "stuff" on the rise – and the "stuff stocks" tagging along for the ride. However, with the euro beginning to decline again on Greece worries, does the company have the internal fundamentals to ride out a renewed decline in "stuff" prices? Let's take a look at the fundamentals and technicals for Freeport McMoran… What the bulls see in Freeport McMoran…• A dividend yield of 0.90%• Some very cheap valuation metrics:o An enterprise value of $47.16 billion which easily trumps the market capitalization of $22.14 billiono A price-to-sales of 1.12o A price-to-book ratio of 1.46o A P/E ratio of around 10 versus estimated revenue and EPS growth for next year of 29.3% and 298% respectively• A current ratio of 2.01 – indicating that they may be "ok" in the short-term in terms of viabilityWhat the bears see in Freeport McMoran…• Negative net profit margins (20.83%)• Weak management effectiveness ratios:o A return-on-assets ratio of 3.99%o A return-on-equity ratio of -16.07%• A very difficult balance sheet situation:o Total cash equivalents of $549 million versus total debt of $20.31 billiono A debt-to-equity ratio of 97.72%The technical take on FCX shares…Technicians note that FCX shares seem to have been rejected at "correction resistance" at $24.15. Unless and until that level is conquered, they say, the bears are to be deemed "in control" overall. Above $24.15, the next two layers of potential resistance come in at $27.25 and $29.34. On the downside, the technicians say that support for FCX seems to come in at the horizontal lines of $20.83 and $19.85. However, those technicians note that FCX, if it were to fulfill one set of technical calculations (the most bearish set, obviously), would trade all the way down to $5.85. (Let us all hope that is not the reality in the future as it would likely mean some sort of global economic upset).Overall…While the valuations of Freeport MacMoran seem to be very attractive, the balance sheet is troubling and the technical outlook (as long as FCX remains below $24.15) is bearish. Under those conditions, it is tough to justify taking heavy long positions in the company's stock. Perhaps if the most bearish technical scenario plays out, both the fundamental, valuation and technical bulls will all jump aboard the FCX bandwagon in unison.