Hudbay Minerals (HBM.TO)

First Quantum (FM-T) or Hudbay (HBM-T)? He tries to only focus in areas of the market that are strong technically and fundamentally. Also, he always looks for new groups of leadership to emerge. In the last few weeks, despite the fact that commodities in general have been spotty, the metals group has started to perform better. Globally, things are getting better economically, but in addition, the US$ has really taken a tumble. When that happens, it tends to be good for emerging markets and good for commodity prices. The 3 metal stocks that stand out would be Hudbay, First Quantum, and Lundin (LUN-T). All 3 look very attractive. He would be OK with all 3.

Base metals producer including predominantly copper and zinc assets around the world. This is really linked to industrial production and global growth. To the extent that this is picking up, it should be a tailwind for this stock. This is not going to be able to coin profits through the cycle, it is going to have boom and bust phases. The conditions seem to be aligning nicely, and the base metals complex for a tailwind to their earnings.

This, like all material stocks, has been punished as the world has been concerned about a Chinese slow down. Zinc is looking really, really interesting as inventories are hitting 7-10 year lows. Copper is going to get tight as we go into 2020. You have to have a timeframe that is 10 years, as you have to get a cycle. Has a good balance sheet.

The bad news is that you had a fairly strong level of resistance and it keeps failing it. The trend line has been broken, definitely. Sell or sell on strength.

This company seems to have trouble getting noticed in the industry. The big build on Constancia is behind them, so going forward they are going to reap the benefits of that. We are seeing a possibility of some significant expansion. They also have the Rosemont mine which will be permitted, probably in the next 12 months. Dividend yield of 0.29%. (Analysts’ price target is $11.25.)

On a seasonal basis, base metal stocks have done well from around October until around April each year. Technically, it is in a downward trend, underperforming the market, momentum indicators on the downside. This is an example of the technicals and the seasonal just not coming together. When you see that, you are better off looking for opportunities elsewhere.

This is fine longer-term. This has been growing, particularly outside of Canada. Feels it is a long-term Hold. It is very difficult for them on an environmental and permitting bases in the US. Well-managed.

He likes their underlying business, but likes other base metal companies more. His suspicion is that if you own this for 3 or 4 years, you are going to be happy, but if you substitute names like Rio Tinto (RIO-N), BHP (BHP-N), or Teck (TECK.B-T), they will perform better with less risk.

This has fallen from $12 to $7.67. He sold some recently at about $9.50, and is looking for an entry point right about here. The reason for this is zinc. The company is basically zinc/copper 50-50. He likes the near term potential for zinc. When zinc moves, we could be in a situation that is referred to as “the pinch point” where you get a spike up because inventories are so low. Zinc could go to $2, just like met coal went from $90-$300, when inventories get tight. Dividend yield of 0.26%. (Analysts’ price target is $11.)

Historically, base metal stocks have done very well from around mid-November, right through until about now. On both a seasonal and technical basis, this is the time to take some money off the table.

Thinks there will be another leg up in the sector, and this company will be a beneficiary of that. It has probably not performed as well as some of its peers, but at current prices it is still a fairly good buy. Constancia is doing very well for them. They have some projects in line for development over the next few years. A lot of their big spends are behind them. This would be one of his top choices in the sector.

Mainly a copper producer with some great assets in north and south America and they are building new mines. He likes copper and where it is going. There have been a number of projects globally where there have been strikes or problems with many companies, so supply has been sort of tempered throughout the year. Global growth is slowly kicking back in, and copper is one of the 1^st ones that really moves with the economy.

This got negative reaction last week because of 2 of its projects, but feels it was an overreaction to the technical update in terms of costs for the Rosemont zinc project. He continues to like this. It also has good copper exposure. He would be patient with this over the next couple of months.

Zinc and copper. He’s been happy owning this over the years. A well-managed company. They’ve made good investments to expand their production out of Manitoba and into south America. Have some really good mines in both countries. Zinc gives you the near term kind of kick, while copper is the metal that everybody is questioning as to what is going to happen to it in 2020-2022. A nice way to participate in the metals rally.

(A Top Pick Feb 4/16. Up 218%.) At the time, they were having some logistical issues at some of their primary mines. The company has become much more focused.