We came across a bullish thesis on Hudbay Minerals Inc. (HBM) on Substack by Danny Brody. In this article, we will summarize the bulls’ thesis on HBM. Hudbay Minerals Inc. (HBM)’s share was trading at $8.32 as of March 20th. HBM’s trailing and forward P/E were 41.60 and 12.92 respectively according to Yahoo Finance.
An open pit mine, with heavy machinery extracting copper ore in the background.
Hudbay Minerals (HBM) stands as a prime beneficiary of the unfolding copper supply crunch. With global copper demand projected to rise 70% by 2050, driven by electrification, AI-driven data centers, and the energy transition, supply constraints are becoming more evident. Declining ore grades, political instability in key copper-producing regions, and chronic underinvestment in new mines have set the stage for a significant price surge. Analysts anticipate a severe shortage by 2026-2027, pushing prices well above $5 per pound. In this environment, companies like Hudbay, which have established operations and growing production capacity, are poised to capitalize.
Hudbay’s recent production surge underscores its strong positioning. In 2023, the company produced approximately 290.3 million pounds of copper, marking a 26% year-over-year increase, with an annual capacity of 337.3 million pounds. Its diversified asset base in Canada and Peru provides a strategic advantage, ensuring steady output even amid geopolitical uncertainties affecting global supply. Additionally, with Chile’s Escondida mine—the world’s largest—experiencing declining grades, and Panama shutting down First Quantum’s Cobre Panamá mine, Hudbay’s output becomes even more valuable.
China’s aggressive copper stockpiling, along with potential U.S. tariffs on imported copper, further tighten supply dynamics. The White House’s recent escalation of base metal tariffs on Canada has raised concerns that copper could be next, potentially amplifying price spikes. Hudbay’s ability to meet this growing demand makes it an attractive investment in a tightening market.
With strong production growth, exposure to rising copper prices, and a favorable macro backdrop, Hudbay offers investors a compelling opportunity. As supply constraints worsen and demand accelerates, Hudbay’s operational strength and growing output position it to benefit immensely from the coming copper supercycle.
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 fourth 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.