Bezant Resources plc (LON:BZT): Is Basic Materials An Attractive Sector Play?

Bezant Resources plc (AIM:BZT), a UK£2.91M small-cap, is a metals and mining operating in an industry which is sensitive to changes in the business cycle, as it supplies materials for construction activities. Moreover, the basic materials sector can be affected by shifts in the housing market, as many produced raw materials are components of construction projects. For example, if new housing development slows, the demand for metal products may also decrease. Basic material analysts are forecasting for the entire industry, a strong double-digit growth of 19.42% in the upcoming year , and a whopping growth of 35.12% over the next couple of years. Not surprisingly, this rate is more than double the growth rate of the UK stock market as a whole. Is the metals and mining industry an attractive sector-play right now? In this article, I’ll take you through the sector growth expectations, and also determine whether Bezant Resources is a laggard or leader relative to its basic materials sector peers. Check out our latest analysis for Bezant Resources

What’s the catalyst for Bezant Resources's sector growth?

Overall, the basic materials sector seems like it has reached maturity in its life cycle. Companies appear to be vastly competitive and consolidation seems to be a natural trend. However, the industry is still facing many emerging trends including the reduction of waste, raw material inflation, and innovation in global supply chain management. In the previous year, the industry saw growth in the thirties, beating the UK market growth of 12.03%. Given the lack of analyst consensus in Bezant Resources’s outlook, we could potentially assume the stock’s growth rate broadly follows its metals and mining industry peers. This means it is an attractive growth stock relative to the wider UK stock market.

Is Bezant Resources and the sector relatively cheap?

The metals and mining sector's PE is currently hovering around 13.98x, in-line with the UK stock market PE of 17.77x. This illustrates a fairly valued sector relative to the rest of the market, indicating low mispricing opportunities. Furthermore, the industry returned a similar 11.26% on equities compared to the market’s 12.79%. On the stock-level, Bezant Resources is trading at a lower PE ratio of 0.23x, making it cheaper than the average metals and mining stock.

Next Steps:

If you’ve been keeping an eye on the materials sector, now is the right time to dive deeper into the stock-level. The high growth prospect makes stocks such as Bezant Resources a more appealing investment case, though the industry is trading relatively in-line with the rest of the wider market. However, before you make a decision on the stock, I suggest you look at Bezant Resources's fundamentals in order to build a holistic investment thesis.

• 1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
• 2. Historical Track Record: What has BZT's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
• 3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Bezant Resources? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.