Markets

Validea's Top Five Basic Materials Stocks Based On Peter Lynch - 9/22/2019

The following are the top rated Basic Materials stocks according to Validea's P/E/Growth Investor model based on the published strategy of Peter Lynch. This strategy looks for stocks trading at a reasonable price relative to earnings growth that also possess strong balance sheets.

RIO TINTO PLC (ADR) (RIO) is a large-cap value stock in the Metal Mining industry. The rating according to our strategy based on Peter Lynch is 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Rio Tinto plc is a mining and metals company. The Company's business is finding, mining and processing mineral resources. The Company's segments include Iron Ore, Aluminium, Copper & Diamonds, Energy & Minerals and Other Operations. The Company operates an iron ore business, supplying the global seaborne iron ore trade. Its Iron Ore product operations are located in the Pilbara region of Western Australia. The Aluminium business includes bauxite mines, alumina refineries and aluminum smelters. Its bauxite mines are located in Australia, Brazil and Guinea. The Copper & Diamonds segment has managed operations in Australia, Canada, Mongolia and the United States, and non-managed operations in Chile and Indonesia. The Energy & Minerals segment consists of mining, refining and marketing operations in over 10 countries, across six sectors: borates, coal, iron ore concentrate and pellets, salt, titanium dioxide and uranium.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

DOMTAR CORP (USA) (UFS) is a mid-cap value stock in the Paper & Paper Products industry. The rating according to our strategy based on Peter Lynch is 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Domtar Corporation designs, manufactures, markets and distributes a range of fiber-based products, including communication papers, specialty and packaging papers and absorbent hygiene products. The Company segments include Pulp and Paper and Personal Care. The Pulp and Paper segment consists of the design, manufacturing, marketing and distribution of communication, specialty and packaging papers, as well as softwood, fluff and hardwood market pulp. The Personal Care segment consists of the design, manufacturing, marketing and distribution of absorbent hygiene products. The Company is a marketer of uncoated freesheet paper in North America serving a range of customers, including merchants, retail outlets, stationers, printers, publishers, converters and end users. It is also a marketer and producer of a line of incontinence care products, as well as infant diapers. It has a network of wood fiber converting assets that produce paper grade, fluff and specialty pulp.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E/GROWTH RATIO: PASS INVENTORY TO SALES: PASS
SALES AND P/E RATIO: PASS YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
INVENTORY TO SALES: PASS EARNINGS PER SHARE: PASS
EPS GROWTH RATE: PASS TOTAL DEBT/EQUITY RATIO: PASS
TOTAL DEBT/EQUITY RATIO: PASS FREE CASH FLOW: NEUTRAL
FREE CASH FLOW: NEUTRAL NET CASH POSITION: NEUTRAL
NET CASH POSITION: NEUTRAL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

ZAGG INC (ZAGG) is a small-cap growth stock in the Fabricated Plastic & Rubber industry. The rating according to our strategy based on Peter Lynch is 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: ZAGG Inc (ZAGG) designs, produces and distributes professional product solutions for mobile devices, including screen protection (glass and film), keyboards for tablet computers and mobile devices, keyboard cases, earbuds, mobile power solutions, cables, and cases under the ZAGG and InvisibleShield brands. In addition, the Company designs, produces and distributes earbuds, headphones, mobile power solutions, Bluetooth speakers, cases and cables for mobile devices under the iFrogz brand in the fashion and youth oriented lifestyle sector. The Company designs product solutions for users of mobile devices, and sells these products to consumers through global distribution partners and online. The Company offers products for various market segments of handheld electronic devices, including smartphones, tablets, notebook computers, laptops, gaming devices, global positioning system (GPS) devices, watch faces, and similar devices and surfaces. Its other brands include mophie and BRAVEN.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E/GROWTH RATIO: PASS INVENTORY TO SALES: PASS P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS SALES AND P/E RATIO: NEUTRAL
INVENTORY TO SALES: PASS EARNINGS PER SHARE: PASS INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS TOTAL DEBT/EQUITY RATIO: PASS EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

ALBEMARLE CORPORATION (ALB) is a mid-cap value stock in the Chemicals - Plastics & Rubber industry. The rating according to our strategy based on Peter Lynch is 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Albemarle Corporation is a global developer, manufacturer and marketer of highly-engineered specialty chemicals. The Company operates through three segments: Lithium and Advanced Materials, Bromine Specialties and Refining Solutions. Lithium and Advanced Materials segment consist of two product categories: Lithium and Performance Catalyst Solutions. The bromine and bromine-based business includes products used in fire safety solutions and other specialty chemicals applications. The Company serves various end markets, including petroleum refining, consumer electronics, energy storage, construction, automotive, lubricants, pharmaceuticals, crop protection, food safety and custom chemistry services. As of December 31, 2016, the Company and its joint ventures operated 31 production and research and development (R&D) facilities, as well as a number of administrative and sales offices, around the world.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E/GROWTH RATIO: PASS INVENTORY TO SALES: PASS P/E/GROWTH RATIO: PASS P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS SALES AND P/E RATIO: NEUTRAL SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS EARNINGS PER SHARE: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS TOTAL DEBT/EQUITY RATIO: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: PASS TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

BHP GROUP PLC (ADR) (BBL) is a large-cap value stock in the Metal Mining industry. The rating according to our strategy based on Peter Lynch is 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: BHP Group PLC, formerly BHP Billiton Plc, is a global resources company. The Company is a producer of various commodities, including iron ore, metallurgical coal, copper and uranium. Its segments include Petroleum, Copper, Iron Ore and Coal. The Petroleum segment is engaged in the exploration, development and production of oil and gas. The Copper segment is engaged in mining of copper, silver, lead, zinc, molybdenum, uranium and gold. The Iron Ore segment is engaged in mining of iron ore. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing. It extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. It manages product distribution through its global logistics chain, including freight and pipeline transportation.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

P/E/GROWTH RATIO: PASS INVENTORY TO SALES: PASS P/E/GROWTH RATIO: PASS P/E/GROWTH RATIO: PASS INVENTORY TO SALES: PASS
SALES AND P/E RATIO: PASS YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS SALES AND P/E RATIO: NEUTRAL SALES AND P/E RATIO: PASS YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
INVENTORY TO SALES: PASS EARNINGS PER SHARE: PASS INVENTORY TO SALES: PASS INVENTORY TO SALES: PASS EARNINGS PER SHARE: PASS
EPS GROWTH RATE: PASS TOTAL DEBT/EQUITY RATIO: PASS EPS GROWTH RATE: PASS EPS GROWTH RATE: PASS TOTAL DEBT/EQUITY RATIO: PASS
TOTAL DEBT/EQUITY RATIO: PASS FREE CASH FLOW: NEUTRAL TOTAL DEBT/EQUITY RATIO: PASS TOTAL DEBT/EQUITY RATIO: PASS FREE CASH FLOW: NEUTRAL
FREE CASH FLOW: NEUTRAL NET CASH POSITION: NEUTRAL FREE CASH FLOW: NEUTRAL FREE CASH FLOW: NEUTRAL NET CASH POSITION: NEUTRAL
NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL NET CASH POSITION: NEUTRAL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

Since its inception, Validea's strategy based on Peter Lynch has returned 377.11% vs. 200.99% for the S&P 500. For more details on this strategy, click here

About Peter Lynch: Perhaps the greatest mutual fund manager of all-time, Lynch guided Fidelity Investment's Magellan Fund to a 29.2 percent average annual return from 1977 until his retirement in 1990, almost doubling the S&P 500's 15.8 percent yearly return over that time. Lynch's common sense approach and quick wit made him one of the most quoted investors on Wall Street. ("Go for a business that any idiot can run -- because sooner or later, any idiot probably is going to run it," is one of his many pearls of wisdom.) Lynch's bestseller One Up on Wall Street is something of a "stocks for the everyman/everywoman", breaking his approach down into easy-to-understand concepts.

About Validea: Validea is an investment research service that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.