Hudbay Minerals Inc. (TSE:HBM) shareholders have had their patience rewarded with a 31% share price jump in the last month. The last 30 days bring the annual gain to a very sharp 52%.
Following the firm bounce in price, Hudbay Minerals may be sending very bearish signals at the moment with a price-to-earnings (or “P/E”) ratio of 36.1x, since almost half of all companies in Canada have P/E ratios under 13x and even P/E’s lower than 7x are not unusual. However, the P/E might be quite high for a reason and it requires further investigation to determine if it’s justified.
Recent times haven’t been advantageous for Hudbay Minerals as its earnings have been falling quicker than most other companies. One possibility is that the P/E is high because investors think the company will turn things around completely and accelerate past most others in the market. You’d really hope so, otherwise you’re paying a pretty hefty price for…
