Watch Materials Stocks: They Have More Room To Run After 70% Rally

Watch Materials Stocks: They Have More Room To Run After 70% Rally

Buying the shares of the companies that produce basic materials for the industrial economy has been a great bet during the past year. The has been one of the top performers over the last year as demand for commodities, like to , have surged.

After this powerful rebound from the COVID-19-triggered recession, analysts believe there are more gains to come. The latest indication that this record rally has more room to run came from Alcoa (NYSE:), the US' largest producer of aluminium.

The company this week reported its first-quarter that beat analysts' expectations. It also projected further gains ahead as economies reopen. Shares of Alcoa have skyrocked since last April, jumping more than 350%. They closed Thursday at $33.21.

Alcoa Weekly Chart.

“Alcoa is expecting a strong 2021 based on continued economic recovery and increased demand for aluminum in all end markets,” the Pittsburgh-based company said in its earnings statement. The company's aluminum segment is forecasting double-digit growth on year-over-year sales of value-added products.

Alcoa Chief Executive Officer Roy Harvey said last month that China is taking meaningful steps to rein in production, calling it a “game-changer” for the industry after years of gluts.

Shares in companies like copper miner Freeport-McMoRan (NYSE:) and