For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Has BHP (BHP) been one of those stocks this year? By taking a look at the stock’s year-to-date performance in comparison to its Basic Materials peers, we might be able to answer that question.
BHP is one of 242 companies in the Basic Materials group. The Basic Materials group currently sits at #6 within the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.
The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. BHP is currently sporting a Zacks Rank of #1 (Strong Buy).
Within the past quarter, the Zacks Consensus Estimate for BHP’s full-year earnings has moved 0.5% higher. This shows that analyst sentiment has improved and the company’s earnings outlook is stronger.
According to our latest data, BHP has moved about 2.8% on a year-to-date basis. In comparison, Basic Materials companies have returned an average of -3.2%. As we can see, BHP is performing better than its sector in the calendar year.
Another stock in the Basic Materials sector, Gerdau (GGB), has outperformed the sector so far this year. The stock’s year-to-date return is 14.2%.
In Gerdau’s case, the consensus EPS estimate for the current year increased 1.3% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Breaking things down more, BHP is a member of the Mining – Miscellaneous industry, which includes 50 individual companies and currently sits at #81 in the Zacks Industry Rank. Stocks in this group have gained about 1% so far this year, so BHP is performing better this group in terms of year-to-date returns.
On the other hand, Gerdau belongs to the Steel – Producers industry. This 24-stock industry is currently ranked #30. The industry has moved +2.2% year to date.
BHP and Gerdau could continue their solid performance, so investors interested in Basic Materials stocks should continue to pay close attention to these stocks.
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