NEW YORK ( TheStreet) -- HudBay Minerals (NYSE: HBM) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • HUDBAY MINERALS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, HUDBAY MINERALS INC reported lower earnings of $0.48 versus $0.73 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 1357.6% when compared to the same quarter one year ago, falling from $13.27 million to -$166.92 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, HUDBAY MINERALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $82.00 million or 3.13% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of HUDBAY MINERALS INC has not done very well: it is down 5.43% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

HudBay Minerals Inc. engages in the discovery, production, and marketing of copper concentrates containing copper, gold, and silver, and zinc metal and zinc oxide in North, Central, and South America. The company has a P/E ratio of 22.3, below the average metals & mining industry P/E ratio of 26.9 and above the S&P 500 P/E ratio of 17.7. HudBay has a market cap of $2.1 billion and is part of the basic materials sector and metals & mining industry. Shares are down 36.1% year to date as of the close of trading on Thursday.

You can view the full HudBay Ratings Report or get investment ideas from our investment research center.
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