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For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. DRDGOLD (DRD) 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? 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.
DRDGOLD is a member of our Basic Materials group, which includes 237 different companies and currently sits at #12 in the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.
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. DRDGOLD is currently sporting a Zacks Rank of #2 (Buy).
The Zacks Consensus Estimate for DRD's full-year earnings has moved 6.4% higher within the past quarter. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Based on the latest available data, DRD has gained about 3.1% so far this year. Meanwhile, the Basic Materials sector has returned an average of 0.8% on a year-to-date basis. This means that DRDGOLD is performing better than its sector in terms of year-to-date returns.
One other Basic Materials stock that has outperformed the sector so far this year is Givaudan SA (GVDNY). The stock is up 7.4% year-to-date.
For Givaudan SA, the consensus EPS estimate for the current year has increased 5.6% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).
Breaking things down more, DRDGOLD is a member of the Mining - Gold industry, which includes 41 individual companies and currently sits at #92 in the Zacks Industry Rank. On average, stocks in this group have gained 5.5% this year, meaning that DRD is slightly underperforming its industry in terms of year-to-date returns.
Givaudan SA, however, belongs to the Chemical - Specialty industry. Currently, this 33-stock industry is ranked #64. The industry has moved +10.2% so far this year.
DRDGOLD and Givaudan SA 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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