Long-established in the Metals & Mining industry, Hudbay Minerals Inc (HBM, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 7.08%, juxtaposed with a three-month change of -5.28%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Hudbay Minerals Inc.
Deciphering the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 5/10
- Growth rank: 2/10
- GF Value rank: 7/10
- Momentum rank: 8/10
Based on the above method, GuruFocus assigned Hudbay Minerals Inc the GF Score of 69 out of 100, which signals poor future outperformance potential.
Understanding Hudbay Minerals Inc's Business
Hudbay Minerals Inc is a Canadian mining company with operations, property developments, and exploration activities across the United States. The major mines that Hudbay operates are located in Manitoba, Canada, Arizona, United States; and Peru. The company is principally focused on the discovery, production, and marketing of base and precious metals. Hudbay produces copper concentrate, which contains copper, gold, and silver, as well as zinc metal. More than half the company's revenue is attributable to the copper business. The company sells copper concentrates to smelters across Asia, America, and Europe, and sells Zinc metal, the next biggest source of revenue, to industrial customers across North America.
Financial Strength Breakdown
Hudbay Minerals Inc's financial strength indicators present some concerning insights about the company's balance sheet health. The company's Altman Z-Scoreis just 0.53, which is below the distress zone of 1.81. This suggests that the company may face financial distress over the next few years. Additionally, the company's low cash-to-debt ratio at 0.12 indicates a struggle in handling existing debt levels.
Profitability Breakdown
Hudbay Minerals Inc's low Profitability rank can also raise warning signals. Additionally, Hudbay Minerals Inc's Gross Margin has also declined over the past five years, as evidenced by the data: 2018: 25.38; 2019: 12.25; 2020: 3.57; 2021: 8.72; 2022: 18.95; . This trend underscores the company's struggles to convert its revenue into profits.
Growth Prospects
A lack of significant growth is another area where Hudbay Minerals Inc seems to falter, as evidenced by the company's low Growth rank. Lastly, Hudbay Minerals Inc predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Next Steps
Given the company's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
