Stockchase Opinions

Sid Mokhtari Hudbay Minerals HBM-T BUY Feb 04, 2019

TV-T vs. HBM-T. TV-T has ties to the zinc market, which has been under severe pressure from tax loss selling. HBM-T would be a better replacement if you want to be here.
$7.900

Stock price when the opinion was issued

precious metals
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DON'T BUY

Doesn't own shares. Considers company a collection of Tier 2 deposits. Prefers better assets in Tier 1 assets. 

RISKY

Copper's been all over the place, and really down lately on a weaker China. Whole copper complex trades at a premium because they know there's this thirst for copper amid shortages. Materially paid down debt. Trades at discount (4.8) to large-cap peers (5.6). He models 40% EPS at a 31 PE.

Was risky, de-risked to a large extent. Copper's not for the faint of heart. A whippy player, but a winner if it continues to execute well and copper does well.

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TOP PICK
Stockchase Research Editor: Michael O'Reilly

HBM focuses on copper, gold and zinc production with primary production in Peru and Canada.  It has benefited from both rising production and prices.  Management has used the growing free cash flow to de-lever its balance sheet, while growing cash reserves.  We recommend setting a stop-loss at $9, looking to achieve $16 -- upside potential of 28%.  Yield 0.1%

(Analysts’ price target is $15.82)
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TOP PICK
Stockchase Research Editor: Michael O'Reilly

We 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)
BUY

One of his primary holdings right now in the mining sector. Well positioned, given the demand for copper being what it is. Last quarter was probably one of their best ever. Gold production was better than hoped. A good place to look if you want a mid-cap mining company.

HOLD

His choice in the mining space, in his global equity growth fund.

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Curated by Michael O'Reilly since 2020.
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PAST TOP PICK
(A Top Pick Oct 31/24, Up 0.4%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with HBM is progressing well.  To remain disciplined, we recommend trailing up the stop (from $10) to $11 at this time.

HOLD

Owns a bit of this, instead of FCX, because it's in Canada and he understands it. Quality of assets not at the standard of FCX, but it's in a safe jurisdiction and he likes management.

WEAK BUY

Tough 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.

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This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Oct 31/24, Down 11.7%)Stockchase Research Editor: Michael O'Reilly

Our 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.