Is Freeport-McMoRan Copper & Gold’s Stock on Clearance?

With shares of Freeport-McMoRan Copper & Gold (NYSE:FCX) plunging nearly 20 percent in only two trading days, is the world’s largest publicly traded copper company an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

Let’s analyze the stock with the relevant sections of our CHEAT SHEET Investing Framework:

E = Earnings Are Mixed Quarter over Quarter

The Arizona-based miner has a good track record of beating analysts’ estimates. Over the past eight quarters, Freeport has surprised to the upside on earnings every time. In the third quarter, adjusted earnings of 86 cents per share easily beat expectations of 73 cents per share. It was also an increase from 80 cents in the second quarter, but a decrease from the 96 cents in the first quarter. In comparison, Freeport earned $1.10 per share in the third quarter of 2011.

In the latest earnings statement, James R. Moffett, chairman of the board, and Richard C. Adkerson, president and chief executive officer, said, “Our global team continues to focus on execution of our plans to achieve efficient and safe production, effective cost management, investment in financially attractive projects and identification of additional reserves and resources.”

Earlier this week, investors found out what kind of projects executives found to be financially attractive…