Opinions
Bill Carrigan
Hudbay Minerals
HBM-T
COMMENT
Mar 18, 2014
Stock price when the opinion was issued
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Premium contentWe reiterate this Canadian producer of copper and gold with holdings extending into South America as a TOP PICK. We like that cash reserves are growing, while debt is retired. It trades at 11x earnings and 1.5x book. We recommend trailing up the stop (from $9) to $10, looking to achieve $16 -- upside potential of 27%. Yield 0.1%
(Analysts’ price target is $16.40)Premium contentTough to answer whether to buy. Impressive beat last quarter, much stronger outlook, markedly higher output in Manitoba, affirmed production guidance, positive free cashflow for 5th consecutive quarter. Nice growth. Not pricey at 18.5x 2025 earnings.
Depends on your view of copper. If you think it's going higher (partly due to Trump and partly to lackluster China), then the better view is yes, buy. He's a copper bull over time.
Premium contentOur PAST TOP PICK with HBM has triggered its stop at $11. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 12%, when combined with our previous guidance.
They operate in less politically risky areas like Peru which is expanding, and are not in Africa, and a copper mine in Arizona. Also will develop a project in Alberta. Today, they reached an agreement with the Cree Nation in Alberta--good news. Copper is needed for electricity production and we will likely see more demand in the future.
(Analysts’ price target is $14.56)Does have international exposure, so it's not immune to geopolitical risk. A country can look stable at the outset of an investment, but then look different 10 years later. More volatile relative to some peers, so you need a strong stomach. Long-term view still positive.
Still in metals, gold and copper, that will deliver growth going forward. Sees demand for gold getting stronger as we move through the year. Copper is still needed for the electrical and infrastructure grid buildouts.
Copper and gold. Significant FCF. Market's waiting to see what happens with its massive copper project in Arizona. Will probably need to find a partner on this one, would boost production by 50%. He hopes for shovels in the ground in 2026, then 2-3 years before first production comes online.
He's watching it for the second half of the year, waiting for an inflection point on Arizona mine news, including possible fast-tracking by the US administration.
Likes copper and thinks copper stocks are at the same place where gold stocks were at the year-end. Because of tax loss selling, gold stocks got absolutely slaughtered, and that was a perfect buying opportunity. Likes the group, but you have to be patient. Chart shows a long downtrend line from latter 2010 and it is just being violated now on the upside. This is a positive trend change. You don’t want the 2013 low ($7.34) violated.