Are Basic Materials Stocks Lagging Reliance, Inc. (RS) This Year?
For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Reliance (RS) 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.
Reliance is one of 279 companies in the Basic Materials group. The Basic Materials group currently sits at #15 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 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. Reliance is currently sporting a Zacks Rank of #1 (Strong Buy).
Over the past 90 days, the Zacks Consensus Estimate for RS' full-year earnings has moved 17.7% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.
Our latest available data shows that RS has returned about 38.7% since the start of the calendar year. In comparison, Basic Materials companies have returned an average of 16.1%. This means that Reliance is performing better than its sector in terms of year-to-date returns.
One other Basic Materials stock that has outperformed the sector so far this year is Sensient Technologies (SXT). The stock is up 37.5% year-to-date.
In Sensient Technologies' case, the consensus EPS estimate for the current year increased 7.7% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).
Looking more specifically, Reliance belongs to the Mining - Miscellaneous industry, a group that includes 89 individual stocks and currently sits at #180 in the Zacks Industry Rank. On average, stocks in this group have gained 23.6% this year, meaning that RS is performing better in terms of year-to-date returns.
On the other hand, Sensient Technologies belongs to the Chemical - Specialty industry. This 46-stock industry is currently ranked #100. The industry has moved +4.9% year to date.
Investors with an interest in Basic Materials stocks should continue to track Reliance and Sensient Technologies. These stocks will be looking to continue their solid performance.
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This article originally published on Zacks Investment Research (zacks.com).
