Hudbay Minerals (HBM.TO)

Just reported. Numbers were not good, but they had a bad winter in Manitoba. Their big Peruvian mine Costanza comes on at the end of this year and it is 71% built with all the fixings being done a little bit under budget. He is looking for $11.50 in a year. Yield of 0.21%.

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.

This company has been down for the last 3 years. Copper is trading below $3. On the other hand, it also has zinc, and zinc is not bad. On a long-term basis, this is probably not a bad place to put money. The question is what is your time horizon?

(Market Call Minute) Fairly defensive. They hold a lot of cash.

We are going into a ramp up / build out phase. Prefers not to own it. This space is better later in the year. FM-T is an alternative as well as a Top Pick today.

It is just in the start of a breakout. Energy and materials group he expects to have a good move now after a few years of trouble.

Likes the copper play. There is no ETF in Canada. All of them should move together and there should be some consolidation in the sector.

(A Top Pick Dec 21/12. Up 12.27%.) Has been making great strides in getting its Book in order. Have some big development projects coming up. They were criticized for taking on the Constancia project in South America because of the large capital costs. Have done a lot lately to defray the fears of how they are going to finance. Did a streaming deal with Silver Wheaton (SLW-T), which means they get capital of front today to help them. Issued some unsecured notes to raise capital. Next year should be a much better year for them with projects coming on.

Got beaten up with the copper stories. Operations continue to do well and generate excellent cash flows. New Peru mine is going to be a large producer in one to two years. Downside is pretty minimal at this point.

(Market call minute.) Good operating team. Had a nice run on the back of the strength on copper stocks recently. Trying to build the mine and it is not a straight line in terms of the stock going up. Would prefer something like Lundin (LUN-T) instead.

(A Top Pick Aug 17/12. Down 8.42%.) A lot of the copper stocks have not acted great. He moved more to Capstone (CS-T) and Lundin (LUN-T), companies that are buying existing production. This company is building 2 mines right now that are coming on the next couple of years, which put you at risk for capital spending budgets. Expect it will become a great Buy again but they need to finance this first.

Stock is cheap enough so you don’t have to worry about downside risk. However, you do have to worry as to whether there is a comeback in commodity stocks. China is showing some signs of easing back on some of their restraints, so hopefully commodities can get on the move again.

Zinc would be one of the least desirable base metals. All the rest of their commodities will be oversupplied until 2016 but it is a cheap company, cash on the books a decent company. You could hold but he would look to get out. Prefers FCX-N with a dividend. TCK is also a good stock to look at.

Likes what they are doing in terms of growing their mines. Have 1 or 2 operating mines in Manitoba in the Flin Flon area and starting up another. More importantly, they have a huge base metal project in Peru. A cheap valuation, but it is a lot of CapX that they are deploying in Peru. If they can’t get things up and running and they’re tight for cash, maybe somebody steps in but he thinks they can do it on their own.

Has a bunch of cash but he anticipates that will all be spent on development plus they will have to raise money in the debt market to complete their plans. Recently cut their dividend by 90% and this is not winning them any friends. Not a bad company. They have great earnings leverage if the metal sector turns around. Expect it will just flat line from here.