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Reviewing how growth is financed can reveal a lot about the health of a company. In cases where a company has used debt conservatively, it demonstrates that finances are closely monitored and that there are other sources of funding like profits and reserves to foster growth. Following this perspective, we scanned the basic materials sector to find stocks that have little long-term debt. Additionally, they have all been rated as "Buy" or better by industry analysts. We think you will enjoy reviewing the list of basic materials stocks we developed.

The Long Term Debt/Equity Ratio is a variation of the traditional debt-to-equity ratio; this value computes the proportion of a company's long-term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company's risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.

The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.

We first looked for basic materials stocks. We then looked for businesses that analysts rate as "Buy" or "Strong Buy" (mean recommendation < 3). We next screened for businesses that operate with little to no long term debt (Long-Term D/E Ratio<0.1). We then screened for businesses that have maintained a sound capital structure (D/E Ratio<0.1). We did not screen out any market caps.

Do you think these stocks deserve to trade higher? Use our screened list as a starting point for your own analysis.

1) Alexco Resource Corporation (NYSEMKT:AXU)

SectorBasic Materials
IndustryNonmetallic Mineral Mining
Market Cap$204.05M
Beta1.85

AXU stock chart

Key Metrics

Analysts' Rating2.30
Long-Term Debt/Equity Ratio0.00
Debt/Equity Ratio0.00
Short Interest1.36%

Alexco Resource Corp. engages in mining, exploring, and developing mineral properties in Canada. It explores for silver, lead, gold, and zinc ores. The company principally owns a 100% interest in Bellekeno property, including 70 surveyed quartz mining leases and 14 unsurveyed quartz mining claims located in Keno Hill Mining District, central Yukon. It also owns a 100% interests in Lucky Queen property comprising 51 surveyed quartz mining leases and 6 unsurveyed quartz mining claims located in the Mayo Mining District, Yukon Territory; a 100% interests in Onek property consisting of 32 surveyed quartz mining leases and 5 unsurveyed quartz mining claims located in Mayo Mining District, Yukon Territory; and a 100% interests in Elsa Tailings property that includes 8 surveyed quartz mining leases located in the town of Elsa, Yukon. In addition, the company provides consulting and project management services in respect of environmental permitting and compliance, and site remediation and reclamation in Canada and the United States. Alexco Resource Corp. was incorporated in 2004 and is headquartered in Vancouver, Canada.

2) Exeter Resource Corporation (NYSEMKT:XRA)

SectorBasic Materials
IndustryGold
Market Cap$157.26M
Beta1.18

XRA stock chart

Key Metrics

Analysts' Rating2.30
Long-Term Debt/Equity Ratio0.00
Debt/Equity Ratio0.00
Short Interest0.48%

Exeter Resource Corporation, an exploration stage company, engages in the acquisition, exploration, and development of mineral properties in the Maricunga Region in Chile. The company primarily explores for gold and copper deposits. It holds a 100% interest in the Caspiche project, a gold-copper porphyry project located in the central Chilean Andes of northern Chile. The company was formerly known as Golden Glacier Resources Inc. and changed its name to Exeter Resource Corporation in October 2002. Exeter Resource Corporation was founded in 1984 and is headquartered in Vancouver, Canada.

3) Tesco Corporation (NASDAQ:TESO)

SectorBasic Materials
IndustryOil & Gas Equipment & Services
Market Cap$385.15M
Beta1.98

TESO stock chart

Key Metrics

Analysts' Rating2.30
Long-Term Debt/Equity Ratio0.00
Debt/Equity Ratio0.00
Short Interest3.87%

Tesco Corporation engages in the design, manufacture, and service delivery of technology based solutions for the upstream energy industry worldwide. The company's Top Drive segment manufactures, sells, and supports top drives used in drilling operations to rotate the drill string while suspended from the derrick above the rig floor. This segment's product line includes various portable and permanently installed top drive products with lifting capacities of 150 through 750 tons, which are hydraulically and electrically powered.

It also provides top drive rental services on a day-rate basis for land and offshore drilling rigs and engages in the recertification of working units, such as top drives, power units, and other top drive product and component repairs. This segment serves drilling contractors, rig builders, equipment brokers, and oil and natural gas operating companies.

Its Tubular Services segment offers proprietary tubular services using its Casing Drive System, a tool that facilitates running and reaming casing into a well bore; and installation service of deep water smart well completion equipment using the company's Multiple Control Line Running System technology. This segment also provides equipment and personnel for the installation of tubing and casing, including power tongs, pick-up/lay-down units, torque monitoring services, connection testing services, and power swivels for new well construction, and in work-over and re-entry operations. The company's CASING DRILLING segment provides CASING DRILLING technology, which allows an oil or gas well to be drilled using well casing pipe, eliminating the use of drill pipe and drill collars. Tesco Corporation was founded in 1986 and is headquartered in Houston, Texas.

4) Avalon Rare Metals Inc. (NYSEMKT:AVL)

SectorBasic Materials
IndustryIndustrial Metals & Minerals
Market Cap$185.46M
Beta2.65

AVL stock chart

Key Metrics

Analysts' Rating2.50
Long-Term Debt/Equity Ratio0.00
Debt/Equity Ratio0.00
Short Interest5.94%

Avalon Rare Metals Inc. engages in the exploration and development of rare metals and minerals in Canada. The company primarily explores for the rare earth elements, such as neodymium, terbium, and dysprosium; and other rare metals and minerals, including lithium, tantalum, cesium, indium, neodymium, terbium, dysprosium, niobium, gallium, zirconium, and calcium feldspar, as well as tin. Its principal property includes the Nechalacho Rare Earth Element project located at Thor Lake, Northwest Territories. The company was formerly known as Avalon Ventures Ltd. and changed its name to Avalon Rare Metals Inc. in February 2009. Avalon Rare Metals Inc. was founded in 1991 and is headquartered in Toronto, Canada.

5) International Tower Hill Mines Ltd. (NYSEMKT:THM)

SectorBasic Materials
IndustryGold
Market Cap$245.30M
Beta0.57

THM stock chart

Key Metrics

Analysts' Rating2.50
Long-Term Debt/Equity Ratio0.00
Debt/Equity Ratio0.00
Short Interest1.13%

International Tower Hill Mines Ltd. engages in the acquisition, exploration, evaluation, and development of mineral properties. It holds a 100% interest in the Livengood gold project covering an area of 145 square kilometers located to the northwest of Fairbanks, Alaska. The company was formerly known as Tower Hill Mines Ltd. and changed its name to International Tower Hill Mines Ltd. in March 1991. International Tower Hill Mines Ltd. was founded in 1978 and is headquartered in Vancouver, Canada.

6) Keegan Resources Inc. (KGN)

SectorBasic Materials
IndustryGold
Market Cap$262.95M
Beta0.81

KGN stock chart

Key Metrics

Analysts' Rating2.30
Long-Term Debt/Equity Ratio0.00
Debt/Equity Ratio0.00
Short Interest1.02%

Keegan Resources Inc., a junior gold company, engages in the exploration and development of gold properties in Ghana, west Africa. The company's principal property includes the Esaase Gold project located in southwest Ghana. It also holds a portfolio of other gold concessions in various stages of exploration in the Asumura Property. The company was formerly known as Quicksilver Ventures Inc. and changed its name to Keegan Resources Inc. in August 2004. Keegan Resources Inc. was incorporated in 1999 and is headquartered in Vancouver, Canada.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 08/31/2012.

Source: 6 Low-Debt Basic Materials Stocks Backed By Analysts