October 17, 2024
Top 10 Stock HudBay Strong 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 October 17, 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 88 (top 88% performer), Obermatt assesses an overall strong buy recommendation for HudBay on October 17, 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 Strong Buy
| 360 METRICS | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 64 |
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| GROWTH | ||||||||
| GROWTH | 93 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| SENTIMENT | ||||||||
| SENTIMENT | 75 |
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| 360° VIEW | ||||||||
| 360° VIEW | 88 |
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ANALYSIS: With an Obermatt 360° View of 88 (better than 88% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock HudBay are very positive. 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 64, 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 64% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 93, 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 75. But the company’s financing is risky with a Safety rank of 26. This means 74% of comparable companies have a safer financing structure than HudBay. ...read more
RECOMMENDATION: With a consolidated 360° View of 88, HudBay is better positioned than 88% 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 64), above-average growth (Growth Rank of 93), and positive market sentiment in the professional investor community (Sentiment Rank of 75), 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 26), 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 very positive
ANALYSIS: With an Obermatt Sentiment Rank of 75 (better than 75% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock HudBay is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for HudBay. Analyst Opinions are at a rank of 93 (better than 93% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 88, which means that currently, professional investors hold more stock in this company than in 88% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 56 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 56% of competitors). But Analyst Opinions Change has a below-average rank of 25, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in HudBay. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 75 (more positive than 75% compared with investment alternatives), HudBay has a reputation among professional investors that is significantly higher than that of its competitors. This is an early 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 might just materialize in the future. ...read more
Value Strategy: HudBay Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 64 (better than 64% 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 64, which means that the stock price compared with what market professionals expect for future sales is lower than for 64% 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 70% 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 58. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 33% of all competitors have even lower dividend yields than HudBay (a Dividend Yield Rank of 33). 67% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 64, 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 93 (better than 93% 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 54, which means that, currently, professionals expect the company to grow more than 54% of its competitors. The same is valid for Profit Growth with a value of 78 and for Capital Growth with 96. In addition, Stock Returns had an above-average rank value of 87, which means they have been higher than 87% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, 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 below-average
| SAFETY METRICS | October 17, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 14 |
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| REFINANCING | ||||||||
| REFINANCING | 55 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 40 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 26 |
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ANALYSIS: With an Obermatt Safety Rank of 26 (better than 26% compared with alternatives), the company HudBay has financing practices on the riskier side, which means that their overall debt burden is 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 just one indicator above average for HudBay and the other two below average. Refinancing is at 55, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. But Leverage is high with a rank of 14, meaning the company has an above-average debt-to-equity ratio. It has more debt than 86% of its competitors. Liquidity is also on the riskier side with a rank of 40, meaning the company generates less profit to service its debt than 60% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 26 (worse than 74% compared with alternatives), HudBay has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for HudBay are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: HudBay Top Financial Performance
| COMBINED PERFORMANCE | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 64 |
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| GROWTH | ||||||||
| GROWTH | 93 |
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| SAFETY | ||||||||
| SAFETY | 40 |
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| COMBINED | ||||||||
| COMBINED | 77 |
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ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% compared with investment alternatives), HudBay (Diversified Metals & Mining, Canada) shares have much better financial characteristics than comparable stocks. Shares of HudBay are a good value (attractively priced) with a consolidated Value Rank of 64 (better than 64% of alternatives), show above-average growth (Growth Rank of 93) but are riskily financed (Safety Rank of 26), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 77, is a strong 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 64) and above-average growth (Obermatt Growth Rank of 93), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 26) 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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