8 Undervalued Basic Materials Stocks Being Bought By Hedge Funds

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 |  Includes: AHGP, CDE, CJES, CRR, GPOR, MOS, REN, SPN
by: Kapitall

Do you like the inflation-hedge properties that commodities stocks can offer? For ideas on how to start your search, here's a screen you might be interested in.

We began by screening the basic materials sector for stocks that appear undervalued to earnings growth, with PEG below 1. We then screened for those with significant net institutional purchases over the current quarter, indicating institutional investors such as hedge fund managers expect these stocks to outperform.

‪Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

Do you agree with hedge funds that these stocks are poised to outperform? Use this list as a starting point for your own analysis.

1. Alliance Holdings GP, L.P. (NASDAQ:AHGP): Produces and markets coal primarily to utilities and industrial users in the United States. PEG at 0.99. Net institutional purchases in the current quarter at 388.9K shares, which represents about 20.91% of the company's float of 1.86M shares.

2. Coeur d`Alene Mines Corporation (NYSE:CDE): Engages in the ownership, operation, exploration, and development of silver and gold mining properties located primarily in South America, Mexico, the United States, and Australia. PEG at 0.49. Net institutional purchases in the current quarter at 3.9M shares, which represents about 4.36% of the company's float of 89.44M shares.

3. C&J Energy Services, Inc. Commo (NYSE:CJES): Provides specialty equipment services for oil and natural gas exploration and production companies in the Texas, Louisiana, and Oklahoma regions of the United States. PEG at 0.30. Net institutional purchases in the current quarter at 11.4M shares, which represents about 26.52% of the company's float of 42.99M shares.

4. CARBO Ceramics Inc. (NYSE:CRR): Manufactures and supplies ceramic proppants primarily used in the hydraulic fracturing of natural gas and oil wells in the United States and internationally. PEG at 0.52. Net institutional purchases in the current quarter at 1.1M shares, which represents about 5.58% of the company's float of 19.73M shares.

5. Gulfport Energy Corp. (NASDAQ:GPOR): Develops, and produces oil and gas in the Louisiana Gulf Coast. PEG at 0.30. Net institutional purchases in the current quarter at 3.8M shares, which represents about 7.87% of the company's float of 48.31M shares.

6. Mosaic Co. (NYSE:MOS): Engages in the production and marketing of concentrated phosphate- and potash-based crop nutrients for the agriculture industry worldwide. PEG at 0.61. Net institutional purchases in the current quarter at 15.1M shares, which represents about 3.55% of the company's float of 424.90M shares.

7. Resolute Energy Corporation (NYSE:REN): Engages in the acquisition, exploration, exploitation, and development of oil and gas properties primarily in onshore properties in the United States. PEG at 0.86. Net institutional purchases in the current quarter at 1.7M shares, which represents about 6.17% of the company's float of 27.57M shares.

8. Superior Energy Services Inc. (NYSE:SPN): Provides specialized oilfield services and equipment to serve the production and drilling related needs of oil and gas companies. PEG at 0.40. Net institutional purchases in the current quarter at 25.2M shares, which represents about 16.27% of the company's float of 154.88M shares.

*Institutional data sourced from Fidelity, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.