Southern Copper Corporation (SCCO): A Bull Case Theory

We came across a bullish thesis on Southern Copper Corporation on X.com by @TheValueist. In this article, we will summarize the bulls’ thesis on SCCO. Southern Copper Corporation's share was trading at $174.37 as of January 13th. SCCO’s trailing and forward P/E were 37.65  and 34.84 respectively according to Yahoo Finance.

Southern Copper Corporation (SCCO) represents a uniquely positioned, high-quality copper producer with vertically integrated operations in Peru and Mexico, combining large-scale open-pit mining with smelting and refining capabilities. The company benefits from a multi-decade reserve base of over 112 billion pounds of copper, supporting a robust growth pipeline anchored by projects like Tia Maria, Los Chancas, Michiquillay, and El Arco.

Its product mix is copper-dominant but strategically leverages byproducts such as zinc, silver, and molybdenum, which in Q3 2025 drove net cash costs down to $0.42/lb, substantially below peer levels, highlighting SCCO’s low-cost, high-margin profile. Despite a temporary decline in copper production, record EBITDA of $1.975 billion and net income of $1.108 billion underscore the company’s resilience and price leverage in a tight global copper market. Strategic decisions, such as prioritizing zinc and silver output at Buenavista, demonstrate operational flexibility to maximize value per tonne of ore rather than just copper tonnage, stabilizing short-term profitability.

While the near-term production trajectory is a trough in 2026–2027, the ramp-up from 2028 onwards, driven by Tia Maria and other large-scale projects, provides a compelling multi-year growth bridge. SCCO’s strong cash flow generation supports an attractive dividend yield, and management’s long-tenured operating experience, coupled with active bench development, provides continuity and execution credibility.

Although minority investors face structural governance and related-party risks, the combination of low-cost production, high byproduct leverage, and a visible growth pipeline positions SCCO for substantial upside should commodity prices remain elevated and project execution proceed smoothly. With net debt under control and capital allocation disciplined, SCCO offers a bullish risk/reward profile, making it an attractive investment for those seeking premium copper exposure with high operational resilience.

Previously, we covered a bullish thesis on Hudbay Minerals Inc. (HBM) by Unemployed Value Degen in December 2024, which highlighted HBM’s operational efficiency, copper and gold diversification, and disciplined capital allocation. HBM’s stock price has appreciated by 152.63% since our coverage due to stable commodity prices and debt reduction. TheValueist shares a similar bullish view on Southern Copper Corporation (SCCO) but emphasizes SCCO’s scale, vertical integration, byproduct-driven low costs, and long-term growth pipeline.

Southern Copper Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held SCCO at the end of the third quarter which was 45 in the previous quarter. While we acknowledge the potential of SCCO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.