Basic materials sector -14% in June, PE trades at 24.3X, below 3-year average PE of 27.1x

Basic materials sector -14% in June, PE trades at 24.3X, below 3-year average PE of 27.1x

Basic materials sector plunged 14.1% for the month of June and 19% on YTD basis.

The industry is trading at a PE ratio of 24.3x, lower than its 3-year average PE of 27.1x.

Analysts are positive on the Construction Materials industry with annual earnings growth expectation of 19% over the next 5 years.

Morgan Stanley notes that multi-year commodity outperformance is rare, but although the rally is long in the tooth, several tailwinds will buttress prices in 2h 2022. Morgan Stanley is most bullish oil (USO) (XOM), gas (UNG) (SHEL) and agricultural commodities, notably sugar.

Global copper supply to outpace demand over the next two years, aided by several upcoming large mine projects, said RBC Capital analysts.

A look at top gainers in the basic materials sector for the month of June (stocks with a market cap of over $2B):

  • WD-40 (WDFC) +6.66%.
  • Balchem (BCPC) +4.3%.
  • Grupo Simec (SIM) +1%
  • GCP Applied Technologies (GCP) -0.51%.

Top decliners in the basic materials sector for the month of June (market cap of over $2B).

  • Companhia Siderurgica (SID) -35.18%.
  • Cleveland-Cliffs (CLF) -33.69%.
  • ArcelorMittal (MT) -30.14%.
  • Gerdau S.A. (GGB) -29.67%.
  • Olin Corporation (OLN) -29.65%.

Other materials ETFs to watch: iShares Global Timber & Forestry ETF (WOOD), Materials Select Sector SPDR ETF (XLB), Vanguard Materials ETF (VAW), iShares Global Materials ETF (MXI), SPDR S&P Metals and Mining ETF (XME), VanEck Vectors Gold Miners ETF (GDX), iShares MSCI Global Gold Miners ETF (RING), Global X Copper Miners ETF (COPX).

Originally Posted on: https://seekingalpha.com/news/3853697-basic-materials-sector-declined-14-in-june?source=feed_tag_commodities
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