Why Hudbay Minerals Inc. Remains an Excellent Long-Term Value Play
At the end of February, Canadian producer of copper and Zinc, Hudbay Minerals Inc. (TSX:HBM) reported earnings which supported much of the increase the company has seen in its share price of late. Hudbay’s share price has rebounded by more than 60% since its 52-week low, providing investors with a very decent rate of return in recent months.
There are multiple factors which have contributed to Hudbay’s continued outperformance in the metals & mining sector, among which are the rising prices of copper and zinc, two metals which are often used as a proxy for improving economic conditions due to their use in industrial applications.
During the company’s fiscal fourth quarter, Hudbay’s earnings of $100 million showed significant year over year improvement, considering last year’s loss of more than $47 million on revenues which were approximately 30% lower ($414 million in 2017 vs. $316 million in 2016).
With rising commodity prices providing the majority of the boost in revenue and profitability for Hudbay, the company also noted that production which exceeded internal targets and debt reduction also contributed to the bottom line impact of the company’s operations.
While Hudbay is one of those companies that is uniquely exposed to commodity prices, such that investors making an investment in Hudbay will be heavily exposed to the underlying commodity prices of zinc and copper, the ability of Hudbay to improve operations and continue to strengthen the company’s balance sheet makes this firm a very compelling long-term value play for investors.
Invest wisely, my friends.