Our monthly sentiment run is a behavioral, market-based gauge of investor sentiment in the Basic Materials Sector. Any relative performance measure is tied to the benchmark S&P 500 Materials Sector INDEX (GICS). Further screening methodologies are included in the link to the tracker below.
CLICK HERE to access the February Sentiment Tracker presentation.
- Looking at short-interest, 6 of the top 12 least shorted names are in the Gold Mining space with large-cap Diversified Metals and Miners being the most heavily shorted (FCX, AA, TCK, AWC, FMG).
- Combining consensus “buy” ratings and short-interest, Diversified Chemicals & Specialty Chemicals have the most positive relative sentiment when combining both metrics. Diversified Metals and Mining, Aluminum, & Commodity Chemicals have the most negative sentiment.
- With the outperformance in precious metals YTD, relative outperformance, declines in volatility premiums, and a cutting in short positioning all suggest the market views Gold Miners much more favorably vs. the beginning of 2016. 5 of top 12 declines in volatility expectations are in Gold Mining names. The largest 2016 YTD spikes in implied vol. come in the chemicals space (9 of top 12), but we believe this is due to broader market volatility.
- The largest sector divergences in growth metrics (TOP-LINE, OPERATING, BOTTOM LINE) exist in the mining space. We expect a downward revision in sell-side estimates in the space as many mining company expectations still need to be taken down while some are already discounted with declining operating leverage.