05. Hudbay Minerals Inc. (NYSE:HBM)
Number of Hedge Fund Holders: 38
Share Price as of September 27: $9.26
Hudbay Minerals Inc. (NYSE:HBM) is a diversified mining company that engages in the exploration, development, operation, and optimization of properties across North and South America. The company produces copper concentrates containing gold, silver, and molybdenum, as well as zinc, molybdenum concentrates, and silver/gold doré. Hudbay Minerals Inc. (NYSE:HBM) flagship asset is the Constancia mine in southern Peru, while it also operates in Manitoba, Canada, and British Columbia. The company was founded in 1927 and is headquartered in Toronto, Canada.
Hudbay Minerals Inc. (NYSE:HBM) recent second-quarter 2024 financial results demonstrate a promising outlook for the stock despite missing on earnings expectations. The company reported a loss per share of $-0.04501, falling short of analysts’ estimates of $0.06. However, Hudbay Minerals Inc. (NYSE:HBM) continues to show operational resilience and solid execution across its diverse asset portfolio.
In the second quarter, Hudbay Minerals Inc. (NYSE:HBM) achieved consolidated copper production of 29,000 tons and consolidated gold production of 59,000 ounces, aligning with its quarterly production targets for 2024. The company reaffirmed its full-year guidance, with copper production expected to be slightly below the midpoint of the range, while gold production is anticipated to surpass the midpoint, thanks to strong performance at the New Britannia Mill in Manitoba. This consistent production level, coupled with higher byproduct credits, allowed Hudbay Minerals Inc. (NYSE:HBM) to reduce its consolidated cash cost guidance to $0.90-$1.10 per pound of copper, down from the previous range of $1.05-$1.25.
Hudbay Minerals Inc. (NYSE:HBM) financial health has also seen significant improvement. The company generated $30 million in free cash flow during the quarter, maintaining its trend of positive cash flow generation. Over the last twelve months, Hudbay has produced nearly $400 million in free cash flow. Additionally, Hudbay’s net debt reduced by over $550 million during the past year, and its net debt to adjusted EBITDA ratio dropped to 0.8x from 2.9x a year ago. This deleveraging effort enhances its balance sheet flexibility, positioning the company to advance key growth initiatives.
As of Q2 2024, 38 hedge funds held positions in Hudbay Minerals Inc. (NYSE:HBM), up from 31 in the previous quarter, reflecting increased institutional interest. Given the company’s strong asset base, cost management, and improving financial metrics, Hudbay Minerals Inc. remains a compelling investment under $10 per share.
L1 Long Short Fund stated the following regarding Hudbay Minerals Inc. (NYSE:HBM) in its Q2 2024 investor letter:
“Hudbay Minerals Inc. (NYSE:HBM) (Long +31%) shares rallied over the quarter driven by rising copper and gold prices, as well as strong production results. The company’s first quarter results showed higher gold production and robust operating performance at both its major assets, which exceeded consensus expectations. In addition, the company announced a ~US$400m equity raise to support balance sheet de-leveraging and fund its key growth projects. Hudbay is a mid-tier mining company primarily producing copper, alongside gold and zinc, with its key assets located in Canada and Peru. We are attracted to Hudbay due to our positive medium-term outlook for copper and the company’s strong near-term free cash flow generation. This cash generation potential will allow the company to de-lever and recycle capital back into its highly prospective exploration program and major growth projects, most notably its Copper World project in Arizona.”
