SCCO is getting close to a value price.

We opined this week on a recommendation to buy ERF a Canadian oil producer.  We continue to like the agency reits, and suggest AGNC, HTS, and CYS as your best selections there. This posting is about another stock that has been backing off lately and is getting close to a purchase price that represents value. 

SCCO is a copper producer with mines in Mexico and Peru. This company is almost exclusively copper and no other metal. What that means is that is highly reflects the current world economy. When business is good the stock can be seen at $40 or higher, when business is slow you will find this stock at $30 or below.  It closed today at $32 and change which and we will consider a position anytime it gets to $30.  Yes, we bet some of you will say that sounds crazy but smart traders and investors make buys when there is value not when the stock is fully priced. 

Not only do we like SCCO when you can get it cheap, we also like it because it pays out a nice dividend generally in excess of 6%.  SCCO's dividend can vary a good bit quarter to quarter as this company adjusts it's payout to profits.  The current payout last quarter if extended for four quarters would be just over 2%, but do not assume that will be the dividend going forward. 

SCCO also offers above average options for those who like to trade. So a good value price, a good dividend, and nice derivatives one has a stock that is an aggressive buy on the world economy.  Keep an eye on SCCO and consider taking a position at or under $30. It might slip a bit from there but the stock should reward you long term at that price. 

Traders could take a put position in Sept. 12 at $25 for $2.00 per share. The stock rarely trades at that level. But if it does you can pick up an outright steal in this stock and pocket your $2.00. If not you still get $2.00 or about a 13.68% annualized gain. Nice either way. 

We do not own SCCO as an option or long, but as noted will consider a position at the suggested price level.