For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Element Solutions (ESI) one of those stocks right now? 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.
Element Solutions is one of 238 individual stocks in the Basic Materials sector. Collectively, these companies sit at #8 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.
The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. Element Solutions is currently sporting a Zacks Rank of #2 (Buy).
Within the past quarter, the Zacks Consensus Estimate for ESI's full-year earnings has moved 2.4% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.
Based on the most recent data, ESI has returned 19.3% so far this year. At the same time, Basic Materials stocks have lost an average of 3.3%. This shows that Element Solutions is outperforming its peers so far this year.
One other Basic Materials stock that has outperformed the sector so far this year is L.B. Foster (FSTR). The stock is up 5% year-to-date.
Over the past three months, L.B. Foster's consensus EPS estimate for the current year has increased 30.8%. The stock currently has a Zacks Rank #2 (Buy).
Looking more specifically, Element Solutions belongs to the Chemical - Specialty industry, a group that includes 33 individual stocks and currently sits at #82 in the Zacks Industry Rank. On average, stocks in this group have lost 18.4% this year, meaning that ESI is performing better in terms of year-to-date returns.
On the other hand, L.B. Foster belongs to the Steel - Producers industry. This 20-stock industry is currently ranked #221. The industry has moved -14.5% year to date.
Element Solutions and L.B. Foster 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
