Are Basic Materials Stocks Lagging Element Solutions (ESI) 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. Has Element Solutions (ESI) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.

Element Solutions is one of 248 individual stocks in the Basic Materials sector. Collectively, these companies sit at #14 in 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 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. 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 3.8% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.

Based on the latest available data, ESI has gained about 52.1% so far this year. At the same time, Basic Materials stocks have gained an average of 19.6%. This shows that Element Solutions is outperforming its peers so far this year.

Teck Resources Ltd (TECK) is another Basic Materials stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 19.9%.

For Teck Resources Ltd, the consensus EPS estimate for the current year has increased 50.1% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

Breaking things down more, Element Solutions is a member of the Chemical - Specialty industry, which includes 44 individual companies and currently sits at #171 in the Zacks Industry Rank. This group has gained an average of 13.1% so far this year, so ESI is performing better in this area.

On the other hand, Teck Resources Ltd belongs to the Mining - Miscellaneous industry. This 72-stock industry is currently ranked #145. The industry has moved +21.8% year to date.

Investors interested in the Basic Materials sector may want to keep a close eye on Element Solutions and Teck Resources Ltd as they attempt to continue their solid performance.

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This article originally published on Zacks Investment Research (zacks.com).

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