Using my value-investing lens, I’ve been looking at a fair amount of companies in the commodities business lately. Commodity prices have fallen more or less across the board over the last several years. Some commodities — such as oil and copper — have fallen dramatically. The underlying share prices of the producing companies trade at multi-year lows.

Copper prices fell by half between 2011 and 2016, dipping ever briefly below $2 per pound. They have since recovered to around $2.62 per pound. A slowing of the Chinese economy was seen as the reason for the multi-year slide. Additionally, producers spent many years boosting production to meet rapidly growing demand as China continues to industrialize.

Lately, investors have been in a holding pattern. Waiting and hoping for a price rebound and the next bull market in copper. Who knows how long they will have to wait.

Freeport-McMoRan Inc (NYSE:FCX) has also been waiting eagerly for the next copper up-cycle. Its collection of mining assets qualifies it as the largest publicly traded miner of copper. Only Codelco, a state-owned mining firm in Chile, is a larger global producer. Smaller rivals include Glencore, BHP Billiton Limited (ADR) (NYSE:BHP), Rio Tinto plc (ADR) (NYSE:RIO), and Vale SA (ADR) (NYSE:VALE).

What’s Happening With Freeport-McMoRan?

FCX also mines for gold where it competes with Barrick Gold Corp (USA) (NYSE:ABX). Gold is largely a fear trade commodity, meaning its price rallies when individuals grow highly concerned about the global economy and life in general.

Speculative-minded investors might try and gamble for a quick price recovery in copper. Goldman Sachs has called for a copper rally in the near-term. The World Bank predicts rising commodity prices in general through 2017 and into next year. It sees some bullish sentiment lately on mine labor strikes and contractual disputes (Freeport-McMoran is in a major one with the Indonesian government) are restricting supply, which should help boost prices.

FCX does indeed have a “world-class copper portfolio” (in its own words in a recent presentation to investors). It owns seven copper mines in North America, two in South America and the one in Indonesia. Its production costs in Indonesia are quite low at $0.83-per-pound. Its other mines can get copper out of the ground at closer to $1.41-per-pound.

But that’s the main problem with investing in firms highly influenced by commodity prices. At one price, they make a lot of money. The higher commodity price, the faster profits come flowing in once production costs have been covered. But when they get depressed, profits can really suffer.

Freeport-McMoran shot itself in the foot in recent years by trying to buy significant oil and gas properties. It happened to do so right before prices bottomed out between the 2011 to 2016 period. So much for having any insight into the future state of commodity prices. The FCX stock price is seriously washed out — it traded close to $60-per-share in early 2011, but is down by a whopping 80%.

But again, a rally in copper prices can really boost Freeport-McMoRan’s profits. The company estimates every 10 cent change in copper prices boosts operating cash flow by some $275 million, or just more than $0.20 per share.

Bottom Line on FCX Stock

The question is when that might happen. Some speculate that the slowing Chinese economy hasn’t been at fault. It is still growing and demanding copper, as well as many other commodities. Perhaps it was the rush to increase supply to meet demand in China and other emerging markets.

Freeport’s low current price-to-earnings ratio helps support a positive investment outlook. The forward P/E of 8.8 is based off earnings expectations of $1.01 this year and a current share price of $11.75 for FCX stock.

A rally in copper prices and resulting earnings in multiple expansion could do wonders for the share price. But yet again, who knows when that will happen.

Investors are most likely better served finding companies that have some pricing power and can better control their own future. Copper producers and other commodity-based firms are largely price takers, meaning they must sell based off where current market prices exist.

Freeport-McMoran doesn’t pay a dividend, either, so there isn’t the option of getting paid to wait for a copper price commodity rebound. Investors versed in finding short-term price point inflections might want to speculate on FCX stock.

Others might want to focus on firms with wider economic moats. Healthcare firms with products that have patent protection definitely qualify. So do the fast-growing Chinese internet firms, which happen to benefit from at least some government backing.

As of this writing, Ryan Fuhrmann did not own any shares of any company mentioned.