For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Allegheny Technologies (ATI) 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.
Allegheny Technologies is a member of our Basic Materials group, which includes 242 different companies and currently sits at #14 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. Allegheny Technologies is currently sporting a Zacks Rank of #1 (Strong Buy).
Within the past quarter, the Zacks Consensus Estimate for ATI’s full-year earnings has moved 44.6% higher. This means that analyst sentiment is stronger and the stock’s earnings outlook is improving.
Based on the most recent data, ATI has returned 45.1% so far this year. Meanwhile, the Basic Materials sector has returned an average of -13.8% on a year-to-date basis. This means that Allegheny Technologies is outperforming the sector as a whole this year.
Another Basic Materials stock, which has outperformed the sector so far this year, is Cameco (CCJ). The stock has returned 3.3% year-to-date.
In Cameco’s case, the consensus EPS estimate for the current year increased 100% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Looking more specifically, Allegheny Technologies belongs to the Steel – Speciality industry, a group that includes 4 individual stocks and currently sits at #27 in the Zacks Industry Rank. This group has gained an average of 14.5% so far this year, so ATI is performing better in this area.
In contrast, Cameco falls under the Mining – Miscellaneous industry. Currently, this industry has 47 stocks and is ranked #194. Since the beginning of the year, the industry has moved -13.5%.
Going forward, investors interested in Basic Materials stocks should continue to pay close attention to Allegheny Technologies and Cameco as they could maintain their solid performance.
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