Basic Materials Sector: Value Investing Analysis
About the Basic Materials Sector
Companies that manufacture chemicals, building materials, and paper products. This sector also includes companies engaged in commodities exploration and processing. Companies in this sector include ArcelorMittal, BHP Billiton, and Rio Tinto.
The Basic Materials sector groups related businesses that share similar economic characteristics, market dynamics, and competitive forces. By analyzing stocks within this sector, you can compare companies on a more level playing field—making it easier to identify which businesses offer the best value for your investment dollars.
Understanding sector performance helps you evaluate whether individual stocks are cheap or expensive relative to their peers. A P/E ratio that looks high in one sector might be a bargain in another. This context is essential for value investors seeking to calculate realistic expected returns.
Basic Materials Stocks: Value Analysis
Below are the stocks we track in the Basic Materials sector, with key value investing metrics. If you have special knowledge about this sector, you have an advantage—use these metrics to find stocks that may be trading below their intrinsic value.
| Company | Current Price | Current Price Discount 10 years |
|---|---|---|
| Sociedad Quimica y Minera de Chile S.A. (SQM) |
$72.84 | none |
| Coeur Mining (CDE) |
$18.15 | none |
| Emerge Energy Services LP (EMES) |
$27.53 | none |
| Luxfer Holdings PLC (LXFR) |
$17.08 | none |
| Western Copper and Gold Corporation (WRN) |
$2.46 | 57.0% |
| SunCoke Energy (SXC) |
$9.41 | 47.3% |
| Harmony Gold Mining Company Limited (HMY) |
$19.90 | 19.0% |
| Element Solutions Inc (ESI) |
$37.27 | none |
| Compass Minerals International (CMP) |
$27.02 | none |
| Nutrien Ltd. (NTR) |
$66.31 | none |
| Methanex Corporation (MEOH) |
$55.23 | none |
| DuPont de Nemours (DD) |
$141.55 | none |
| Minerals Technologies (MTX) |
$74.42 | none |
| Seabridge Gold (SA) |
$31.25 | none |
| Kinross Gold Corporation (KGC) |
$27.40 | none |
| Cross Timbers Royalty Trust (CRT) |
$9.91 | none |
| DRDGOLD Limited (DRD) |
$23.67 | none |
(CF ) |
$121.48 | none |
| Endeavour Silver Corp. (EXK) |
$10.24 | none |
| North European Oil Royalty Trust (NRT) |
$9.09 | none |
| Paramount Gold Nevada Corp. (PZG) |
$1.54 | none |
| Solitario Zinc Corp. (XPL) |
$0.76 | none |
| Gerdau S.A. (GGB) |
$4.96 | none |
| Summit Materials (SUM) |
$0.00 | none |
| Tecnoglass (TGLS) |
$41.43 | none |
| Horsehead Holding Corp. (ZINC) |
$26.17 | none |
| ICL Group Ltd (ICL) |
$5.34 | none |
| Crude Oil (BZ) |
$17.46 | none |
| Commercial Metals Company (CMC) |
$73.21 | none |
| Flexible Solutions International (FSI) |
$4.98 | none |
| Westlake Chemical Partners LP (WLKP) |
$21.68 | none |
| CEMEX, S.A.B. de C.V. (CX) |
$11.30 | none |
| United States Lime & Minerals (USLM) |
$120.31 | none |
| Boise Cascade Company (BCC) |
$84.75 | none |
| Wincash Apolo Gold & Energy (APLL) |
$0.00 | none |
| Cleveland-Cliffs (CLF) |
$12.49 | none |
| Eastman Chemical Company (EMN) |
$73.42 | 17.7% |
| Dow (DOW) |
$30.58 | none |
| The Mosaic Company (MOS) |
$23.47 | 46.0% |
| Linde plc (LIN) |
$492.46 | none |
| Franco-Nevada Corporation (FNV) |
$240.90 | none |
| Texas Pacific Land Trust (TPL) |
$350.44 | none |
| Gibraltar Industries (ROCK) |
$48.86 | none |
| Gevo (GEVO) |
$1.57 | none |
| Tenaris S.A. (TS) |
$54.26 | none |
| CF Industries Holdings (CF) |
$121.48 | none |
| Natural Resource Partners L.P. (NRP) |
$105.10 | none |
| Tredegar Corporation (TG) |
$8.38 | none |
| Flotek Industries (FTK) |
$37.62 | none |
| Celanese Corporation (CE) |
$44.46 | none |
| Alcoa Corporation (AA) |
$51.63 | 13.7% |
| Louisiana-Pacific Corporation (LPX) |
$74.39 | none |
| China Green Agriculture (CGA) |
$0.00 | 80.3% |
| Westwater Resources (WWR) |
$0.62 | none |
| Trilogy Metals (TMQ) |
$3.88 | none |
| Gold Fields Limited (GFIOF) |
$32.10 | none |
| Codexis (CDXS) |
$1.47 | none |
| Owens Corning (OC) |
$138.90 | none |
| Peabody Energy Corporation (BTU) |
$20.82 | 68.9% |
| DMC Global (BOOM) |
$7.28 | none |
| Corning Incorporated (GLW) |
$124.05 | none |
| Belden (BDC) |
$122.73 | none |
| Northwest Pipe Company (NWPX) |
$123.21 | none |
| Churchill Capital Corp. (CCC) |
$6.46 | none |
| Nucor Corporation (NUE) |
$256.02 | none |
| Newmont Corporation (NEM) |
$91.34 | none |
| Golden Minerals Company (AUMN) |
$0.16 | none |
| Century Aluminum Company (CENX) |
$46.90 | none |
| Beacon Roofing Supply (BECN) |
$0.00 | none |
| United States Steel Corporation (X) |
$0.00 | none |
| Vulcan Materials Company (VMC) |
$283.92 | none |
| Amyris (AMRS) |
$0.00 | none |
| Allegheny Technologies Incorporated (ATI) |
$177.92 | none |
How to Invest in Basic Materials Stocks
Sector-Specific Considerations
When evaluating Basic Materials companies, consider these key factors:
- Sector fundamentals: Is this sector growing, mature, or declining? Growth prospects affect reasonable earnings forecasts.
- Economic sensitivity: How does this sector perform in different economic conditions? Understanding cyclicality helps you time purchases.
- Competitive dynamics: Are barriers to entry high or low? Strong moats protect profits and justify premium valuations.
- Regulatory environment: Does government policy significantly impact this sector? Regulatory changes can create risks or opportunities.
- Capital intensity: Does the business require heavy capital investment? Capital-light businesses often generate better returns.
✓ Sector Analysis Checklist
- Compare P/E ratios within the sector
- Look for strong free cash flow generation
- Assess debt levels relative to peers
- Evaluate dividend sustainability
- Check management track record
- Calculate margin of safety
Common Sector Pitfalls
- Chasing last year's hot sector
- Ignoring sector-wide headwinds
- Overpaying for market leaders
- Neglecting competitive threats
- Failing to diversify across sectors
- Not understanding the business model