For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Sigma Lithium Corporation (SGML) 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? Let's take a closer look at the stock's year-to-date performance to find out.
Sigma Lithium Corporation is one of 248 individual stocks in the Basic Materials sector. Collectively, these companies sit at #12 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 emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Sigma Lithium Corporation is currently sporting a Zacks Rank of #2 (Buy).
Over the past 90 days, the Zacks Consensus Estimate for SGML's full-year earnings has moved 46% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
Based on the latest available data, SGML has gained about 27.5% so far this year. Meanwhile, stocks in the Basic Materials group have gained about 14.3% on average. This shows that Sigma Lithium Corporation is outperforming its peers so far this year.
Another stock in the Basic Materials sector, Braskem (BAK), has outperformed the sector so far this year. The stock's year-to-date return is 66.1%.
In Braskem's case, the consensus EPS estimate for the current year increased 97.2% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
To break things down more, Sigma Lithium Corporation belongs to the Mining - Miscellaneous industry, a group that includes 72 individual companies and currently sits at #175 in the Zacks Industry Rank. On average, this group has gained an average of 25% so far this year, meaning that SGML is performing better in terms of year-to-date returns.
On the other hand, Braskem belongs to the Chemical - Specialty industry. This 44-stock industry is currently ranked #140. The industry has moved +8.6% year to date.
Investors interested in the Basic Materials sector may want to keep a close eye on Sigma Lithium Corporation and Braskem as they attempt to continue their solid performance.
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This article originally published on Zacks Investment Research (zacks.com).