The Metals and Mining (MEM) sector has been lagging behind the Nasdaq over the past few months. Despite this, investors have seen a few bright spots here and there that are outperforming its peers. In this article, we will take a look at some of these outperforming sectors and discuss some of their potential investment opportunities.
First, the Coal sector has been a relative outperformer despite the broader sluggish trend in MEM. Several recent quarterly earnings reports from major players, such as Peabody Energy, show that while earnings have dropped compared to the same period in prior years, they are showing signs of stabilization in the short-term. Peabody Energy’s profits were up 7.7% on a sequential basis, a sign that the industry is taking steps toward recovery.
Next up is Iron Ore. Continuing the uptick from last year, the spot price for iron ore has been steadily climbing since the start of 2020, rising more than 40%. Iron ore is a fundamental input for industrial production, so increased demand and prices could signal an uptick in overall manufacturing output in the near future.
Finally, steel production has been a noteworthy standout this year. Although metal prices were down heading into the pandemic, steel mills began to surge as infrastructure spending boomed and demand from automakers returned. This spurred a rally in steel stocks, some of which more than doubled from their March lows.
Investors should make sure to keep an eye on the Metals and Mining (MEM) sector for potential opportunities. While the sector has been lagging the broader Nasdaq, there are several bright spots to keep an eye on. Coal, Iron Ore, and Steel are all showing strong momentum, with some of their stocks delivering outsized returns. Investors should watch the sector closely for further signs of strength.
“Nasdaq Slips, But These Sectors Shine Brightly: MEM TV Investigates!
