Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. 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, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
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- 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 swung to a loss, reporting -$0.13 versus $0.49 in the prior year.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, HUDBAY MINERALS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for HUDBAY MINERALS INC is currently lower than what is desirable, coming in at 30.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.67% trails that of the industry average.
- The share price of HUDBAY MINERALS INC has not done very well: it is down 18.65% 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has significantly decreased by 55.5% when compared to the same quarter one year ago, falling from $4.51 million to $2.01 million.
-- Written by a member of TheStreet Ratings Staff