In this article, we discuss the 5 best basic material stocks to buy now. If you want to read our detailed analysis of these companies, go directly to the 10 Best Material Stocks to Buy Now.
5. Dow Inc. (NYSE:DOW)
Number of Hedge Fund Holders: 40
Dow Inc. (NYSE:DOW) ranks fifth on the list of 10 best material stocks to buy now. The Michigan-based company manufactures and sells chemicals, plastics, and agricultural products.
Investment manager Richard Pzena’s Pzena Investment Management is the biggest stakeholder of the Michigan-based chemical company as of the second quarter, with a $336 million stake. Overall, 40 funds of the 873 elite funds tracked by Insider Monkey reported owning stakes in Dow Inc. (NYSE:DOW) at the end of June 2021.
In the second quarter of 2021, Dow Inc. (NYSE:DOW) reported an EPS of $2.72, beating estimates by 0.28. The company’s revenue in the second quarter came in at $13.88 billion, beating revenue estimates by $1.09 billion. Dow Inc. (NYSE:DOW) currently pays its shareholders an annual dividend of $2.80 per share and offers a yield of 4.81%. The stock gained 19% in the past twelve months.
4. LyondellBasell Industries N.V. (NYSE:LYB)
Number of Hedge Fund Holders: 41
LyondellBasell Industries N.V. (NYSE:LYB) is a chemical manufacturer based in Texas that ranks fourth on the list of 10 best material stocks to buy now. LyondellBasell Industries N.V. (NYSE:LYB) is one of the leading chemical, plastic, and refining companies in the world.
On October 8, JPMorgan analyst Jeffrey Zekauskas kept an Overweight rating on LyondellBasell Industries N.V. (NYSE:LYB), with a price target of $135 per share. The stock gained 24% in the past twelve months.
In the second quarter of 2021, LyondellBasell Industries N.V. (NYSE:LYB) reported an EPS of $6.12, beating estimates by $0.50. The company’s second-quarter revenue was $11.56 billion, beating revenue estimates by $472.53 million.
LyondellBasell Industries N.V. (NYSE:LYB) currently offers a dividend yield of 4.61% and pays its shareholders an annual dividend of $4.52 per share.
Of the 873 elite funds tracked by Insider Monkey, 41 were long LyondellBasell Industries N.V. (NYSE:LYB) at the end of June. Entrepreneur and hedge fund manager Ken Griffin of Citadel Investment Group is one of the hedge funds with the largest stake in LyondellBasell Industries N.V. (NYSE:LYB), holding 1.44 million shares worth $149 million at the end of the second quarter.
3. Alcoa Corporation (NYSE:AA)
Number of Hedge Fund Holders: 44
Alcoa Corporation (NYSE:AA) is a Pittsburgh-based aluminum producer that ranks third on the list of 10 best material stocks to buy now. The company mines bauxite and iron ore, as well as smelts, processes, and fabricates aluminum.
On September 28, investment bank Morgan Stanley kept an Overweight rating on Alcoa Corporation (NYSE:AA) and raised its price target for the stock to $62 from $51.
Israel Englander’s Millennium Management recently upped their stake in Alcoa Corporation (NYSE:AA) by 1,095% at the end of the second quarter to 3.59 million shares worth $133 million. Overall, 44 funds were bullish on Alcoa Corporation (NYSE:AA) by the end of the June quarter, compared to 38 in the previous quarter.
In the second quarter of 2021, Alcoa Corporation (NYSE:AA) reported an EPS of $1.49, beating estimates by $0.18. The company’s revenue in the second quarter grew 32% year over year to $2.83 billion and beat revenue estimates by $196 million. Shares of Alcoa Corporation (NYSE:AA) increased 262% in the past twelve months.
2. DuPont de Nemours, Inc. (NYSE:DD)
Number of Hedge Fund Holders: 57
American chemical company DuPont de Nemours, Inc. (NYSE:DD) ranks second on the list of 10 best material stocks to buy now. The Delaware-based company is one of the world’s biggest producers of specialty chemicals producers. The company manufactures and sells adhesives, polymers, photovoltaics, resins, and lubricants used in a variety of applications such in the medical, industrial, telecom, and automotive industries.
On October 5, JPMorgan analysts upgraded DuPont de Nemours, Inc. (NYSE:DD) to Overweight from Neutral and increased its price target for the stock to $85 from $84.
In the second quarter of 2021, DuPont de Nemours, Inc. (NYSE:DD) reported an EPS of $1.06, beating estimates by $0.11. The company’s revenue in the second quarter was $4.13 billion. Shares of DuPont de Nemours, Inc. (NYSE:DD) increased 25% in the past twelve months.
At the end of the second quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $1.65 billion in DuPont de Nemours, Inc. (NYSE:DD), up from 49 hedge funds in the previous quarter worth $1.72 billion.
Rhizome Partners mentioned DuPont de Nemours, Inc. (NYSE:DD) in its Q1 2021 investor letter:
“We have written extensively about the anticipated DuPont’s Reverse Morris Trust merger with International Flavors and Fragrances (IFF) in January of 2021. During the quarter, DuPont shares traded up significantly in anticipation of the deal. We tendered about 40% of our DuPont shares for IFF and received about half of the allocation due to pro-ration. Investors are finally starting to appreciate DuPont’s effort to cut costs, streamline operations, and spin off companies into pure-play companies that trade at higher multiples. We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as DuPont.”
1. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 76
Mining giant Freeport-McMoRan Inc. (NYSE:FCX) tops the list of the 10 best material stocks to buy now. The Arizona-based mining company engages in the exploration of minerals such as copper, molybdenum, and gold. The company runs several mining facilities in North and South America. Freeport-McMoRan Inc. (NYSE:FCX) also mines one of the biggest copper and gold deposits in the world located in Papua, Indonesia, in the Grasberg minerals district.
On October 6, Exane BNP Paribas analyst Jatinder Goel upgraded Freeport-McMoRan Inc. (NYSE:FCX) to Outperform from Neutral, with a price target of $39.50 per share. Meanwhile, BofA analyst Lawson Winder reiterated a Buy rating and a $30 price target for the mining stock.
On October 11, shares of Freeport-McMoRan Inc. (NYSE:FCX) climbed 8.4% as copper prices went up 2.6%to $9,280 a ton on the London Metal Exchange.
In the second quarter of 2021, Freeport-McMoRan Inc. (NYSE:FCX) reported an EPS of $0.77, beating estimates by $0.02. The company’s revenue in the second quarter grew 85% year over year to $5.75 billion. The stock gained 104% in the past twelve months.
As of the end of the second quarter, 76 hedge funds tracked by Insider Monkey reported owning stakes in Freeport-McMoRan Inc. (NYSE:FCX). The total worth of these stakes is $3.86 billion. This shows the hedge fund sentiment is positive for the mineral mining company as only 68 funds had stakes in the company in the previous quarter, having a total worth of $3.29 billion.
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