Has Commercial Metals (CMC) Outpaced Other Basic Materials Stocks 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. Is Commercial Metals (CMC) one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Basic Materials peers, we might be able to answer that question.

Commercial Metals is one of 242 companies in the Basic Materials group. The Basic Materials group currently sits at #7 within 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 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. Commercial Metals is currently sporting a Zacks Rank of #1 (Strong Buy).

Over the past three months, the Zacks Consensus Estimate for CMC's full-year earnings has moved 13.8% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.

Based on the most recent data, CMC has returned 36.1% so far this year. Meanwhile, the Basic Materials sector has returned an average of -2.7% on a year-to-date basis. As we can see, Commercial Metals is performing better than its sector in the calendar year.

Another Basic Materials stock, which has outperformed the sector so far this year, is Southern Copper (SCCO). The stock has returned 0.8% year-to-date.

In Southern Copper's case, the consensus EPS estimate for the current year increased 5.4% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

Breaking things down more, Commercial Metals is a member of the Steel – Producers industry, which includes 24 individual companies and currently sits at #30 in the Zacks Industry Rank. On average, stocks in this group have gained 2.6% this year, meaning that CMC is performing better in terms of year-to-date returns.

In contrast, Southern Copper falls under the Mining – Non Ferrous industry. Currently, this industry has 13 stocks and is ranked #95. Since the beginning of the year, the industry has moved +16.7%.

Commercial Metals and Southern Copper 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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Zacks Investment Research

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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