BCPC - Basic materials sector cracks 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's 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, 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 ).

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