For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Globe Specialty Metals (GSM) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Basic Materials sector should help us answer this question.
Globe Specialty Metals is a member of our Basic Materials group, which includes 238 different companies and currently sits at #10 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.
The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. Globe Specialty Metals is currently sporting a Zacks Rank of #1 (Strong Buy).
Over the past 90 days, the Zacks Consensus Estimate for GSM's full-year earnings has moved 23% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.
Our latest available data shows that GSM has returned about 9.5% since the start of the calendar year. In comparison, Basic Materials companies have returned an average of -9.3%. This means that Globe Specialty Metals is performing better than its sector in terms of year-to-date returns.
Another Basic Materials stock, which has outperformed the sector so far this year, is Mercer International (MERC). The stock has returned 14.5% year-to-date.
For Mercer International, the consensus EPS estimate for the current year has increased 21.9% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).
Breaking things down more, Globe Specialty Metals is a member of the Mining - Miscellaneous industry, which includes 46 individual companies and currently sits at #166 in the Zacks Industry Rank. Stocks in this group have lost about 8.7% so far this year, so GSM is performing better this group in terms of year-to-date returns.
In contrast, Mercer International falls under the Paper and Related Products industry. Currently, this industry has 13 stocks and is ranked #31. Since the beginning of the year, the industry has moved -15.5%.
Investors interested in the Basic Materials sector may want to keep a close eye on Globe Specialty Metals and Mercer International as they attempt to continue their solid performance.
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