Q: I have some shares of LUN and they are up 50%. Is it time to take profits or do you think the company has a longer runway. I noticed it has peaked around this price a few times. Where are we in the business cycle and where do materials fit in as they are very cyclical -is that correct? thank you!
5i Research Answer:
Copper is highly cyclical and particularly sensitive to China and global growth, but there are several long-term tailwinds for copper, including increasing use in electronics and EV. We like coppers recent momentum and LUN is moving largely in line with the industry. It trades at an OK valuation, and we could see the space continuing to move higher in the intermediate term. For an investor that is looking for materials exposure and feels that the price of copper will continue to move higher, we feel that LUN looks fairly attractive here.