May 16, 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 Low Emission Leaders
HudBay is listed as a top 10 stock on May 16, 2024 in the market index Low Emissions 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 70 (high 70% performer), Obermatt assesses an overall buy recommendation for HudBay on May 16, 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 | May 16, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 50 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 16 |
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| SENTIMENT | ||||||||
| SENTIMENT | 72 |
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| 360° VIEW | ||||||||
| 360° VIEW | 70 |
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ANALYSIS: With an Obermatt 360° View of 70 (better than 70% 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 50, 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 50% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 99, 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 72. 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 70, HudBay is better positioned than 70% 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 50), above-average growth (Growth Rank of 99), and positive market sentiment in the professional investor community (Sentiment Rank of 72), 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 72 (better than 72% 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 all four indicators above average for HudBay. Analyst Opinions are at a rank of 91 (better than 91% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 69, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in HudBay. The Professional Investors rank is 53, which means that currently, professional investors hold more stock in this company than in 53% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 54 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 54% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 72 (more positive than 72% compared with investment alternatives), HudBay has a reputation among professional investors that is above-average compared with that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean HudBay stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: HudBay Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 50 (better than 50% 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, where half the indicators are below and half above average for HudBay. Price-to-Sales (P/S) is 62, which means that the stock price compared with what market professionals expect for future sales is lower than for 62% of comparable companies, indicating a good value concerning HudBay's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 50% of alternatives (50% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 34 are lower than average (dividends are expected to be lower than 66% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 47, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 50, is a buy recommendation based on HudBay's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for HudBay may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: HudBay Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 99 (better than 99% 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 but one indicator above average for HudBay. Profit Growth has a rank of 83 which means that currently professionals expect the company to grow its profits more than 83% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 98, and Stock Returns has a rank of 100 which means that the stock returns have recently been above 100% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 45 (55% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 99, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: HudBay Debt Financing Safety risky
| SAFETY METRICS | May 16, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 12 |
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| REFINANCING | ||||||||
| REFINANCING | 35 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 42 |
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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 42, meaning that the company generates less profit to service its debt than 58% 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 12, meaning the company has an above-average debt-to-equity ratio. It has more debt than 88% of its competitors. Finally, Refinancing is at a rank of 35 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 65% 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 | May 16, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 50 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 42 |
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| COMBINED | ||||||||
| COMBINED | 63 |
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ANALYSIS: With an Obermatt Combined Rank of 63 (better than 63% 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 50 (better than 50% of alternatives), show above-average growth (Growth Rank of 99) but are riskily financed (Safety Rank of 16), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 63, 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 50) and above-average growth (Obermatt Growth Rank of 99), 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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