Basic material stocks became popular with the increase in raw material prices due to the strong growth of China from the recent year. Not only directly commodity mining stocks exploded, also supplier of mining equipment started to boom. The basic material sector is a small investment field with around 600 listed companies. I made a list of the best stocks picks for next year. My criteria are:
- Forward P/E under 15
- Past 5Y Sales growth over 10 percent
- Earnings per share growth for the next five years over 10 percent
- Operating Margin over 10 percent
- Market capitalization above USD 10 billion
Nine higher capitalized stocks remained the screening criteria of which eight are currently recommended to buy. The results are dominated by stocks from the oil & gas equipment and services industry. I am not sure if these picks could be the best growth driver for your private wealth. Sure, America is expected to have a current energy boom due to shale gas.
Here is the full table with some fundamentals:
Take a closer look at the full list. The average P/E ratio amounts to 18.10 and forward P/E ratio is 11.08. The dividend yield has a value of 2.51 percent. Price to book ratio is 1.81 and price to sales ratio 2.90. The operating margin amounts to 24.97 percent. The average stock has a debt to equity ratio of 0.42.
Related stock ticker symbols:
SDRL, RIO, ESV, SLB, AUY, GG, BHI, HAL, NOV