Sunday, July 13, 2014

Seeking Alpha: Execution Helping Hudbay Minerals Get Its Due

I wrote about Hudbay Minerals (HBM) as a Top Idea almost a year ago to the day, and in that time, the stock is up 56% - not quite matching fellow Top Idea First Quantum (OTCPK:FQVLF) over that time (up 70%), but still doing pretty well amidst a better environment for copper miners (with Lundin Mining (OTCPK:LUNMF) and Freeport McMoRan (FCX) also up nicely over the past year). This performance comes without a huge improvement in copper prices and with Hudbay still facing some significant financing needs to get its growth projects up and running.

While I still like Hudbay quite a lot in terms of it being a quality mining company, I'm not as bullish given the good run in the shares. The acquisition of Augusta Resource (AZC) adds some significant long-term growth potential, but not so much to today's NAV. With a fair value around $11.50, I see less margin of error for production, operating costs, and construction projects, but still some upside remaining.

Read more here:
Execution Helping Hudbay Minerals Get Its Due

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