Agrium Inc. (USA) (AGU), Cytec Industries Inc (CYT), Rockwood Holdings, Inc. (ROC): Materials: A 3-Stock Portfolio

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Since I believe there is great value to be unlocked going forward, I would assign Rockwood a 40% portfolio weight.

Bottom line

The three companies named above have strong cash-flow generation capabilities, trade at fair multiples and are working hard to speed up sales and ameliorate margins. If you want exposure to materials, you can add this portfolio to your trading account. The portfolio will produce a 1.1% cash dividend yield, but you will be invested in companies that are buying back shares or reorganizing themselves to drive shareholder value higher.

Federico Zaldua has no position in any stocks mentioned. The Motley Fool owns shares of Rockwood Holdings.

The article Materials: A 3-Stock Portfolio originally appeared on Fool.com.

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