We came across a bullish thesis on Hudbay Minerals Inc. (HBM) on Substack by Unemployed Value Degen. In this article, we will summarize the bulls’ thesis on HBM. Hudbay Minerals Inc. (HBM)’s share was trading at $7.24 as of Feb 24th. HBM’s trailing and forward P/E were 36.20 and 10.49 respectively according to Yahoo Finance.
A mine entrance, showcasing the precious metals and minerals that this company produces.
Hudbay Minerals (HBM) has seen its stock decline from $9 to $7.15, largely due to two factors: rising all-in-sustaining costs (AISC) and lower production guidance for 2025. The company now projects AISC for copper at $2.25 per pound, up from the original $2.00 for 2024. However, management has a track record of operational excellence, as seen in 2024 when AISC was lowered from $2.00 to $1.75 and ultimately came in at $1.62. While cost inflation is an inherent challenge in mining, long-term investors in HBM are betting on higher copper prices, which remain the key driver of the stock’s performance.
The second factor weighing on the stock is reduced production guidance, as the Pampacancha satellite pit at the Constancia mine in Peru nears exhaustion by Q4 2025. While production at Copper Mountain and Snow Lake is increasing, the Pampacancha decline offsets those gains. However, the market appears overly focused on production volume rather than revenue impact. Despite lower gold production guidance—247,000 ounces for 2025 versus 263,000 ounces in 2024—higher gold prices have more than compensated. With gold now trading at $2,950 per ounce compared to 2024’s average of $2,386, projected gold revenue increases from $627 million to $728 million, a dynamic the market may be overlooking.
HBM is nearing a major inflection point with its Copper World project. Management had committed to not starting development until it had $600 million in cash, and it currently holds $582 million. Finalizing project financing, securing a joint venture partner, and selling a royalty stream are the remaining steps before construction begins. With current commodity prices—copper at $4.56 per pound, gold at $2,950 per ounce, and silver at $32.81 per ounce—2025 revenues are projected between $1.9 billion and $2.4 billion. Historically, HBM has traded at a price-to-sales multiple of over 3.0x, compared to its current 1.36x. A multiple rerating alone could double the stock price, and if commodity prices continue to rise, the upside could be even greater.
Hudbay Minerals Inc. (HBM) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held HBM at the end of the third quarter which was 35 in the previous quarter. While we acknowledge the risk and potential of HBM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HBM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.