RE: SP driver6 May 2026 11:00
Distressed” normally means a company is struggling to service its debt, has liquidity issues, or is at risk of restructuring. HBR is nowhere near that. It’s generating solid operating cash flow, covering interest comfortably, and the debt largely comes from acquisitions of producing assets—not from plugging holes in the balance sheet.
Yes, leverage went up post-acquisition, but that’s typical in the energy sector. The key point is that those assets generate EBITDA and cash flow, which is what allows the company to delever over time. That’s very different from a business with declining earnings and no path to reduce debt.
Also, if HBR were genuinely distressed, you’d see it in market signals—credit spreads blowing out, refinancing stress, suspended shareholder returns, etc. That’s not the case. It’s fair to argue that deleveraging could help rerate the stock, but calling the balance sheet “distressed” is just inaccurate.