NEW YORK (TheStreet) -- Shares of Augusta Resource Co. (AZC) are trading higher, up 8.05% to $3.22, on very high volume after HudBay Minerals Inc. (HBM) sweetened its offer to buy all of the outstanding common shares of that it doesn't already own.
HudBay owns about 16% of Augusta, and the revised offer is worth about $516 million based on 100% of the fully-diluted common shares.
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Augusta's board determined the revised offer is fair to its shareholders.
Shares of HudBay Minerals are down -3.38% to $9.42. on Monday morning
Separately, TheStreet Ratings team rates HUDBAY MINERALS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate HUDBAY MINERALS INC (HBM) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. 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 and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HUDBAY MINERALS INC has experienced 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 poor results of -$0.59 versus -$0.12 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 1453.1% when compared to the same quarter one year ago, falling from $2.01 million to -$27.13 million.
- 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 rather low; currently it is at 20.49%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -25.40% is significantly below that of the industry average.
- HBM, with its decline in revenue, underperformed when compared the industry average of 4.5%. Since the same quarter one year prior, revenues fell by 11.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: HBM Ratings Report