Mentioned: Canfor Corp (CFP) , E.I. du Pont de Nemours & Co (DD) , Monsanto Co (MON) , DuPont de Nemours Inc (DD) , Compass Minerals International Inc (CMP) , Cameco Corp (CCJ) , Syngenta AG (SYT) , Bayer AG (BAYRY)
- On a market-capitalization-weighted basis, our basic materials coverage trades at a 44% premium to our estimate of intrinsic value, making it the most expensive sector we cover.
- Metals and mining stocks look especially expensive. Metals prices have been propped up by a combination of Chinese stimulus and supply cuts, but neither source of strength looks sustainable.
- U.S. housing plays remain among the pockets of opportunity in an otherwise overvalued sector. We expect housing activity will continue to build momentum in the remainder of the year.
- The remaining obstacles to major consolidation within the seeds and crop chemicals industry are likely to be overcome. We expect all three major deals to close this year.
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Daniel Rohr has a position in the following securities mentioned above: CMP, MON. Find out about Morningstar’s editorial policies.