For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Innospec (IOSP) 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? Let's take a closer look at the stock's year-to-date performance to find out.
Innospec is one of 275 individual stocks in the Basic Materials sector. Collectively, these companies sit at #14 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Innospec is currently sporting a Zacks Rank of #2 (Buy).
Over the past 90 days, the Zacks Consensus Estimate for IOSP's full-year earnings has moved 1.2% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.
Based on the most recent data, IOSP has returned 19.6% so far this year. Meanwhile, the Basic Materials sector has returned an average of 13.8% on a year-to-date basis. This shows that Innospec is outperforming its peers so far this year.
Another Basic Materials stock, which has outperformed the sector so far this year, is Ingevity (NGVT). The stock has returned 30.7% year-to-date.
For Ingevity, the consensus EPS estimate for the current year has increased 6.9% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Breaking things down more, Innospec is a member of the Chemical - Diversified industry, which includes 31 individual companies and currently sits at #96 in the Zacks Industry Rank. On average, stocks in this group have gained 20.2% this year, meaning that IOSP is slightly underperforming its industry in terms of year-to-date returns.
In contrast, Ingevity falls under the Chemical - Specialty industry. Currently, this industry has 46 stocks and is ranked #106. Since the beginning of the year, the industry has moved +13%.
Investors interested in the Basic Materials sector may want to keep a close eye on Innospec and Ingevity as they attempt to continue their solid performance.
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