Q: I have a position in ERO, but after seeing a recent commentary in the Globe about its “limited upside” compared to Capstone or Hudbay Minerals, I’m thinking of switching from ERO to either CS or HBM, position size the same for my risk tolerance. What do you think of this idea?
5i Research Answer:
We think ERO is OK and it is priced well. Based on its very strong earnings growth profile we would not say upside is limited vs the sector. EPS is expected to more than double in 2025. That being said, we like CS 'better' overall. It likely has more leverage to a sector rally. We would be OK owning both, and OK with a switch, with less interest in a switch if taxes apply on a sale.