March 7, 2024
Top 10 Stock HudBay Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: HudBay – Top 10 Stock in Rare Earth Mining and Production
HudBay is listed as a top 10 stock on March 07, 2024 in the market index Rare Earth because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 71 (high 71% performer), Obermatt assesses an overall buy recommendation for HudBay on March 07, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Diversified Metals & Mining |
| Index | Low Emissions, Copper, Iron, Lithium, Zinc, Rare Earth, Silver, Uranium, TSX Composite |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View HudBay Buy
| 360 METRICS | March 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 16 |
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| SENTIMENT | ||||||||
| SENTIMENT | 57 |
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| 360° VIEW | ||||||||
| 360° VIEW | 71 |
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ANALYSIS: With an Obermatt 360° View of 71 (better than 71% compared with alternatives), overall professional sentiment and financial characteristics for the stock HudBay are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for HudBay. The consolidated Value Rank has an attractive rank of 65, which means that the share price of HudBay is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 65% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 100, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 57. But the company’s financing is risky with a Safety rank of 16. This means 84% of comparable companies have a safer financing structure than HudBay. ...read more
RECOMMENDATION: With a consolidated 360° View of 71, HudBay is better positioned than 71% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 65), above-average growth (Growth Rank of 100), and positive market sentiment in the professional investor community (Sentiment Rank of 57), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 16), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of HudBay is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for HudBay positive
ANALYSIS: With an Obermatt Sentiment Rank of 57 (better than 57% compared with alternatives), overall professional sentiment and engagement for the stock HudBay is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for HudBay. Analyst Opinions are at a rank of 87 (better than 87% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 60 which means that currently, professional investors hold more stock in this company than in 60% of alternative investment opportunities. But Analyst Opinions Change has a rank of 7, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in HudBay. Furthermore, Market Pulse has a rank of 43, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 57% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 57 (more positive than 57% compared with investment alternatives), HudBay has a reputation among professional investors that is above-average compared with that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: HudBay Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 65 (better than 65% compared with alternatives), HudBay shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for HudBay. Price-to-Sales (P/S) is 69, which means that the stock price compared with what market professionals expect for future sales is lower than for 69% of comparable companies, indicating a good value regarding HudBay's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 64% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 64. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 34% of all competitors have even lower dividend yields than HudBay (a Dividend Yield Rank of 34). 66% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 65, is a buy recommendation based on HudBay's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: HudBay Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 100 (better than 100% compared with alternatives) for 2024, HudBay shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for HudBay. Sales Growth has a value of 59, which means that, currently, professionals expect the company to grow more than 59% of its competitors. The same is valid for Profit Growth with a value of 77 and for Capital Growth with 100. In addition, Stock Returns had an above-average rank value of 75, which means they have been higher than 75% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 100, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, HudBay exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: HudBay Debt Financing Safety risky
| SAFETY METRICS | March 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 15 |
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| REFINANCING | ||||||||
| REFINANCING | 34 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 39 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 16 |
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ANALYSIS: With an Obermatt Safety Rank of 16 (better than 16% compared with alternatives), the company HudBay has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of HudBay is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for HudBay. Liquidity is at 39, meaning that the company generates less profit to service its debt than 61% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 15, meaning the company has an above-average debt-to-equity ratio. It has more debt than 85% of its competitors. Finally, Refinancing is at a rank of 34 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 66% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 16 (worse than 84% compared with alternatives), HudBay has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: HudBay Above-Average Financial Performance
| COMBINED PERFORMANCE | March 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| COMBINED | ||||||||
| COMBINED | 68 |
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ANALYSIS: With an Obermatt Combined Rank of 68 (better than 68% compared with investment alternatives), HudBay (Diversified Metals & Mining, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of HudBay are a good value (attractively priced) with a consolidated Value Rank of 65 (better than 65% of alternatives), show above-average growth (Growth Rank of 100) but are riskily financed (Safety Rank of 16), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 68, is a buy recommendation based on HudBay's financial characteristics. As the company HudBay's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 65) and above-average growth (Obermatt Growth Rank of 100), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 16) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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