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 a member of our Basic Materials group, which includes 248 different companies and currently sits at #7 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 system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. Element Solutions is currently sporting a Zacks Rank of #2 (Buy).
Over the past 90 days, the Zacks Consensus Estimate for ESI's full-year earnings has moved 3% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Our latest available data shows that ESI has returned about 62.3% since the start of the calendar year. Meanwhile, the Basic Materials sector has returned an average of 12.7% on a year-to-date basis. This means that Element Solutions 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 Reliance (RS). The stock is up 25.4% year-to-date.
The consensus estimate for Reliance's current year EPS has increased 3.9% 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 #90 in the Zacks Industry Rank. Stocks in this group have gained about 9.1% so far this year, so ESI is performing better this group in terms of year-to-date returns.
On the other hand, Reliance belongs to the Mining - Miscellaneous industry. This 72-stock industry is currently ranked #162. The industry has moved +22.2% year to date.
Element Solutions and Reliance 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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This article originally published on Zacks Investment Research (zacks.com).