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Any good investor will tell you that it pays not to have all your eggs in one basket. The power of diversification is all the more potent in stock market. I like to diversify my holdings among different sectors. Basic Material companies form the core of an economy and generally are considered to be a conservative choice. On the other hand, I use various metrics to pick stocks from a select sector. P/E ratio tells you about the companies which are relatively cheaply priced in comparison its peers. So, here is my list of top Basic Material companies with low P/E ratios:
Cliff Natural Resources Inc. (NYSE:CLF): The company is engaged in the business of natural resources and mining. Cliff Natural Resources has solid market capitalization of $5.42 billion and its current P/E ratio is 6.57. It has mines and mining properties spread over a number of states including Alabama and Michigan. The company is based out of Cleveland in Ohio and it was formed in 1847. Cliff Natural Resources also has mining resources in Brazil and Australia. The stock has Outperform rating from BMO Capital Markets and its price target has been set at $60. Cliff Natural Resources has traded in the range of $32.25 and $78.85 in the past 52 weeks and it has beta of 2.45.
CF Industries Holdings Inc. (NYSE:CF): The stock has traded in the range of $128.03 and $227.99 in the past 52 weeks. CF Industries Holdings has P/E ratio of 7.91 and its current market capitalization stands at $12.94 billion. The company announced its recent most Earnings per Share at $26.10 while its market beta is 1.6. It is involved in the business of manufacturing and marketing fertilizers. The company announced its financial results for the third quarter of the year. It beat consensus estimates by announcing its net income at $403.3 million, up from $330.9 million it had reported for the corresponding quarter a year earlier. Its net income for the quarter was estimated to be at $5.82 per share, whereas it stood at $6.35 per share.
Vale SA (NYSE:VALE): This $96.78 billion company has P/E ratio of 8.25. Vale SA is engaged in the business of producing and exploring basic metals. The company stock has traded in the range of $15.77 and $26.87 in the past 52 weeks. The stock has equal weight rating from Morgan Stanley. Vale carries out its business of exploring and marketing of basic material in Brazil and internationally. The company was formed in 1942 and is based out of Brazil. Vale SA stock has beta of 1.75. Vale SA has well diversified business model and also has steel, energy and logistic business. The company recently reported its third quarter results and missed to meet analysts’ expectations. Its revenue declined 9.8 percent sequentially.
Huntsman Corporation (NYSE:HUN): The company has ‘Hold’ rating from Jefferies Group and its price target stands at $18. Huntsman Corporation stock has traded in the range of $9.32 and $17.17 in the past 52 weeks and the stock’s beta stands at 2.26. The company’s market capitalization stands at $4.06 billion. Huntsman Corporation has Price Earnings ratio of 8.08 and it is engaged in the business of manufacturing and marketing organic and inorganic chemicals. The company is based out of Utah and it was formed in 1970. The company recently announced its financial numbers for its third quarter of the year and it beat consensus estimates. Huntsman Corporation reported its net income at $116 million. On per share basis, its net income stood at 48 cents per share and its revenue for the quarter stood at $2.74 billion.
AngloGold Ashanti Ltd. (NYSE:AU): The company has Price Earnings ratio of 8.48 and it commands market capitalization of $13.05 billion. AngloGold Ashanti is currently dealing with labor unrest and has recently fired a number of striking workers. The strike had negative impact on the company’s production volume for the quarter. AngloGold Ashanti has Outperform rating from Credit Suisse. The company is involved in the business of exploring and producing gold. AngloGold Ashanti is based out of South Africa and it was formed in 1944. It is operational globally in various countries including Ghana, Tanzania and Australia.
