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Are Basic Materials Stocks Lagging Steel Dynamics (STLD) This Year?

The Basic Materials group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is Steel Dynamics (STLD) 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.

Steel Dynamics is one of 236 individual stocks in the Basic Materials sector. Collectively, these companies sit at #11 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 is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. Steel Dynamics is currently sporting a Zacks Rank of #1 (Strong Buy).

Within the past quarter, the Zacks Consensus Estimate for STLD's full-year earnings has moved 47.2% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.


Based on the most recent data, STLD has returned 11.6% so far this year. In comparison, Basic Materials companies have returned an average of 5.1%. This means that Steel Dynamics is outperforming the sector as a whole this year.

One other Basic Materials stock that has outperformed the sector so far this year is Taseko Mines (TGB). The stock is up 15% year-to-date.

In Taseko Mines' case, the consensus EPS estimate for the current year increased 42.9% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).

Looking more specifically, Steel Dynamics belongs to the Steel - Producers industry, which includes 24 individual stocks and currently sits at #20 in the Zacks Industry Rank. On average, this group has gained an average of 19.5% so far this year, meaning that STLD is slightly underperforming its industry in terms of year-to-date returns.

On the other hand, Taseko Mines belongs to the Mining - Miscellaneous industry. This 50-stock industry is currently ranked #160. The industry has moved -1.7% year to date.

Going forward, investors interested in Basic Materials stocks should continue to pay close attention to Steel Dynamics and Taseko Mines as they could maintain their solid performance.

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Zacks Investment Research