Hudbay Minerals (HBM.TO)

Base metal stocks have very distinct seasonality. There are 2 of them. One of the better ones is normally from January until April of each year. On a technical basis, it has done very well and has just broken through new highs. Stock is in an upward trend and is outperforming the market. Even though the period of seasonal strength has ended, it is still a winner and you want to stick with it. Look for opportunities to take some profits, and that will probably happen within the next 2-3 weeks. We are already seeing signs that copper and zinc prices have already rolled over and are showing signs of weakness.

It is a short for him. It is based on the valuation. It has a lot of debt and low cash flow. They are in the danger zone. However, momentum has started to move up. There will come a time when the momentum overrules his criticism on valuation.

Sold his holdings recently when it went through the $12 level. Got a little concerned about the copper move and commodities in general. Still have to raise some financing. They have some production growth over the next couple of years. A little bit strapped cash wise and need to do either a financing or a royalty agreement on some of their future production.

Copper had a bit of a run and has now pulled back. This stock is definitely outperforming its peers. There are only about 4 of these major stocks that are available, and he would imagine that within a year or 2, at least one is going to disappear.

1^st quarter earnings were a minus. This is a metals commodity company. The commodity cycle is so negative at this particular point in time. There is lots of copper and there is lots of gold. You are not going to see this do well until this part of the commodity cycle turns. There is no evidence that this is going to be sometime soon.

Base metals have a couple of seasonality periods. First is from November until now. China increasing its stimulus for their markets is really what is driving this recently. Right now this is a positive technical pattern in that we are past the highs of 2014. The best way to play this is to put a $11.50 stop loss on the position.

(A Top Pick May 2/14. Up 28.4%.) It has run a lot in the last couple of weeks. This is zinc and copper. They have the big Constancia project in Peru, which is up and running now and will be in production in a few months. This is just about the time when copper will start to run, so they will have a lot of free cash flow to put their Arizona project into production.

He generally plays it with more international stocks. There are improvements coming and this one will be a beneficiary of them. It should appreciate over time.

Within the materials group, this is one of his favourite stocks, primarily because Constancia is coming on stream this year. Over the next couple of years, he expects to see significant cash flow being thrown out of their operations. Prefers it at $10, but wouldn’t hesitate to buy at this level.

This has positive seasonality at this time of year. Typically it is from mid-October right through until around April/May of each year. Technically on a trend basis it is looking good and is above its 20 day moving average. It is also outperforming the TSE Composite right now. This gives 3 technicals which are positive and the seasonality is also positive. You should continue to Hold, but be aware that the seasonality ends sometime in May. Watch the technicals very closely.

Just too early for this. This is one of those commodity situations that has yet to play out. You are not going to get much out of this stock in the foreseeable future. Dividend is not particularly attractive, so why bother?

He is very negative. He is struggling to see a catalyst. Also there is labour unrest. This is a hold.

The metals had a big day today. We are just below the recent high of last fall. Metals can do well into April and this one could start turning up here. There has been talk that TCK.B-T would do well to take a look at this one.

In the case of any of the base metal companies, some have had some pretty significant moves off their bottom recently. He would think that this is still pretty much a China story, and the story is probably not getting that much rosier, at least in the near term.

Shied away from base metals completely. China right now is quite opaque in what is happening with their banking system. Some of the real estate is starting to burst. However, he is hearing a lot of mixed signals.